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Infrastructure plan will not cause excessive debt: premier

2017/08/21 20:27:44

Taipei, Aug. 21 (CNA) Premier Lin Chuan (林全) said in a recent interview that the special budget proposed by the Cabinet for the "forward-looking infrastructure development plan" will not create excessive public debt.

Together with the government's annual budget, the special budget will be subject to the debt and borrowing limits set forth in the Public Debt Act, a practice different from that adopted by past administrations, Lin said in an interview with CNA on Aug. 16.

Some people have voiced strong opposition to the special budget plan because they still hold the impression that special budgets allow the government to bypass the Public Debt Act, thus creating more leeway to borrow money and burdening future generations with debt, he noted.

"We are trying to set a good example for the country's finances," he said. "It doesn't matter even if we cannot win the public's understanding. This is a price worth paying."

According to the Public Debt Act, the maximum ratio of accumulated debt cannot exceed 40 percent of the average gross domestic product (GDP) of the previous three years.

Under the Special Budget Statute for Forward-Looking Infrastructure passed by the Legislature last month, the Cabinet will spend up to NT$420 billion over the next four years on the country's infrastructure.

The first stage of implementation is expected to cost NT$108.90 billion from September 2017 to December 2018.

On the question why the infrastructure development plan is not covered by the Cabinet's annual budget, the premier explained that because the plan is not a regular item, it is better to deal with it using a special budget.

With a special budget, the government needs to think clearly what goals it wants to achieve within a specific time frame and whether they are feasible, he said.

(By Ku Chuan and Y.F. Low)