The central government has not withheld financial support to Kaohsiung City, the Executive Yuan said in response to Mayor Chen Chu's claim today that nearly NT$30 billion (US$1 billion) is owed to the city for public construction projects.
First, the central government has not been dragging its feet in amending the Act Governing the Allocation of Government Revenues and Expenditures or the Public Debt Act, Executive Yuan officials pointed out. Proposed amendments to the allocation act have been sent to the Legislative Yuan, where they are marked for priority review in the upcoming session. As for the Public Debt Act, meetings are being called to gather input from local governments in order to cover all grounds. As soon as the revision proposal passes the Executive Yuan, it too will be sent as a priority case to the legislature. And before both amendments are officially passed, the central government will make every effort to assist local governments financially.
Second, to meet local fiscal needs in the interim, the Ministry of Finance together with the Directorate-General of Budget, Accounting and Statistics (DGBAS) have already worked out a mechanism to redistribute centrally funded tax revenues among local governments. The DBGAS has also raised the amount of general and special-project grants as another measure of assistance.
Kaohsiung City, for instance, received central tax revenues and grants in 2011 amounting to NT$51.7 billion (US$1.7 billion), an increase of NT$9.6 billion (US$320 million) from 2010. In 2012, funding to the southern city grew to NT$52.9 billion (US$1.8 billion), a growth of NT$10.8 billion (US$360 million) over 2010. These figures are higher than those of Taipei City and New Taipei City—clear evidence that the central government is not favoring the north over southern parts of the country.
To address Mayor Chen's unease over insurance premium debts that are weighing on local governments, the Executive Yuan said it would subsidize 50 percent of health insurance premiums owed by Taipei and Kaohsiung city governments on behalf of residents whose domiciles are registered elsewhere. The debt reduction subsidy will be paid in annual installments so as to spread its benefits across fiscal years.