New Taipei City set to issue city treasury bonds
By Chi-hao James Lo ,The China Post
July 9, 2014, 12:01 am TWN
TAIPEI, Taiwan -- The New Taipei City Government yesterday released a statement revealing the city government's plan to issue city treasury bonds (市庫券) as early as August in order to relieve the city's budget shortage. Currently, the city's annual expenditure exceeds incoming revenue.
The bonds will be available to brokers and used as diverse financing. The bonds will serve as a means to loan money from private investors, the city government stated.
With the government treasury security (國庫券) as a reference, the issuing mechanism for the bonds will seek to distribute NT$10 billion to the private sector. As opposed to applying for loans from banks, said a city government representative, the bonds have lower interest rates, aiding the improvement of the interest expenditures on the finances of the New Taipei City Government. Should the bonds be issued successfully, New Taipei City would be the first local government to distribute city treasury bonds.
According to New Taipei City Government Department of Finance Commissioner Lu Wei-chin (呂衛青), the annual revenue of the city government last year stood at NT$137.1 billion, while its annual expenditure stood at NT$146.759 billion.
In the past, the shortage, such as last year's NT$9.5 billion, was dealt with through bank loans, financial adjustments and capital allocations, said Lu. However, in wishing to diversify its risk, the city government began planning the distribution of city treasury bonds in 2011, and has since completed the designs of the bonds' related legal mechanisms through amendments and approval from the Financial Supervisory Commission (金融監督管理委員會). The Issuing of City Treasury Bonds Autonomous Regulation (市庫券發行自治條例) was also passed in 2011, said the commissioner.
Mayor Chu Responds to the Distribution of Treasury Bonds
During the New Taipei City Municipal Meeting yesterday, New Taipei City Mayor Eric Chu (朱立倫) stated that though New Taipei was officially promoted to a city, the finances of the city have been treated in the same way as when it was Taipei County.
This has resulted in various financial difficulties, said the mayor, as observed through the lack of amendment progress on the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) and the Act Regulating Automotive Fuel Use Fee Collection and Allocation (汽車燃料使用費徵收及分配辦法).
The lack of amendment progress on both acts has since caused a NT$20 billion loss in the city government's annual revenue, a responsibility that members of the Legislative Yuan and the New Taipei City Government should be held accountable for, said Chu.