Sun, Mar 01, 2009 page3

• ANALYSIS: Academics slam special budget for wastefulness

  • By Shih Hsiu-chuan / STAFF REPORTER
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  The government could find it difficult to achieve the goals it set out for the NT$500 billion (US$14.4 billion) special four-year budget, as the plan lacks long-term strategies to help the nation’s economy recover and thrive, analysts said.

  Under the economic stimulus plan, which has yet to be discussed in the legislature, the government would spend NT$150.6 billion this year on top of the NT$1.8096 trillion in annual expenditure.

  After reviewing the spending items in the budget request, Tu Jenn-hwa (杜震華), an associate professor of economics at National Taiwan University’s Graduate Institute of National Development, said he doubted the plan would boost the economy.

  “[The proposal] is reminiscent of research by the World Bank on why its aid projects in developing countries did not achieve good results [because] recipients ate into funds that were supposed to be used in the projects. They did that for their personal use — and that’s aside from the corruption problem,” Tu said.

  Tu said that many items in the special budget were not supposed to be included.

  “The money earmarked for specific purpose should be spent on ‘newly created’ and ‘emergent’ projects to help drive the economy, projects that are not covered by the government’s annual budget,” he said.

  Citing some funds to be used on hardware upgrades at government agencies, Tu said: “This is a waste of resources. Such inefficiency will counter the desired effects of the stimulus plan.”

  “The government will not cut its annual budget for the next few years, even though some expenses are covered in the special budget. This will result in unnecessary spending,” he said.

  Tu said the government should rewrite the budget to deliver on the promises made by President Ma Ying-jeou (馬英九) last Saturday that the government would help strengthen six emerging industries — tourism, medical care, biotechnology, green energy, culture and creativity, and quality agriculture.

  “The special budget should be used efficiently to lay the foundations for the country’s long-term development,” Tu said. “This includes setting up state-of-the-art museums to attract tourists, or increasing computer usage in rural communities, where information is desperately needed to help farmers manage production and avoid surplus problems.”

  The way the funds are to be allotted and a main approach for distributing the money — directly to township offices — make the economic stimulus plan look like pork-barrel projects, he said.

  Given the Chinese Nationalist Party’s (KMT) majority in the legislature, the chances that the budget will be adopted are extremely high, Tu said, adding that the government should put monitoring mechanisms in place to ensure the money does not disappear as a result of corruption.

  Lin Wan-i (林萬億), a professor of sociology at National Taiwan University, said the four-year budget showed that the government not only failed to recognize the problems facing the country and the changes taking place in the world, but that it was also confused about how to lead the country to a better future.

  According to the budget statement, the NT$15.6 billion would be used in 64 major programs aimed at improving transportation networks, culture and quality of life, living environments, national competitiveness and help stabilize the job market and education system.

  Among the budgetary items, aside from the NT$37.2 billion earmarked to assist students facing financial difficulties, help them find employment and cultivate talent, the rest of the money would be spent on items involving capital expenditure.

  Lin said that many capital expenditure items were supposed to be covered by the annual budget as they were “everyday items” such as enhancing the safety of the railway system, resolving leak problems caused by aging water pipelines, dredging irrigation system and so on.

  Larger projects included an extension to Taipei City’s MRT Nangang line, the establishment of the Xinyi line, railway grade separation projects in Taipei, Taichung, and Kaohsiung, repairing badly damaged bridges, rehabilitating hillsides as well as expanding sewage systems and storm water sewer systems.

  Lin said that appropriating money from a special budget funded by loans to the government would cause many problems.

  “[Construction projects] often cost more than what is actually required. Roads could be dug up again and again for no reason other than using the entire budget, a process during which some people will line their pockets. Oftentimes, these small and fragmentary construction projects damage the environment,” he said.

  On top of that, “such squandering will saddle our descendents with debts,” he said.

  Lin criticized the government for failing to use the opportunity to address the fundamental problems that have beset the country for a long time and instead proposing a budget that would waste money.

  “The government should have included some visionary plans for the country’s development. It could just as well spend NT$500 billion or more in preparatory works for a long-term care system for senior citizens or subsidize people who would like to work in remote areas where there is a serious lack of teachers,” he said.

  Wang To-far (王塗發), an adjunct professor of economics at National Taipei University, said he had found many examples of the government playing fast and loose with taxpayers’ money in the budget plan.

  About 30 percent of the budget was written as subsidies for local governments, Wang said.

  “Without each item of expenditure detailed in the plan, it seems to me that the money is to be used to guarantee the support of local political factions who can in turn help the KMT solicit votes in future elections,” he said.

  A former legislator, Wang said that many of the spending items concerning flood prevention and land subsidence control overlapped with items that were included in the “eight-year, NT$116 billion flood prevention” plan implemented by the former Democratic Progressive Party administration, which was approved by the legislature in 2006 and will last until 2014.

  Reserving some of the money for trips abroad also didn’t make sense, he said.

  “Is there really a sense of urgency now that officials need to conduct overseas business trips — on borrowed money? Will the money spent overseas help the country’s economy?” Wang asked.
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