Government planning to introduce a unique financial plan
The Cabinet in Taiwan has convened a meeting to discuss a special budget aimed at softening the impact on industries, following the passing of the Special Act for Strengthening Economic, Social, and National Security Resilience last month. The proposed budget, valued at NT$545 billion, includes a universal cash handout of NT$10,000. However, the constitutional validity of this cash handout is under challenge by Taiwan’s Cabinet, which plans to seek a Constitutional Court review of this provision.
The Executive Yuan, Taiwan's Cabinet, argues that the cash handout provision in the special act contravenes the Constitution. Instead of asking the legislature to reconsider the act, the Cabinet has decided to seek a Constitutional Court review.
The special act also includes NT$150 billion for whole-of-society defense resilience, NT$93 billion for industry and employment support, and NT$67 billion for social support. However, a NT$100 billion subsidy for supporting state-run Taiwan Power Co was removed from the special act.
Regarding exclusions for wealthy households, the materials do not provide specific details. Given the universal nature of the cash handout, it is implied to include all households without initial exclusions. The Executive Yuan plans to propose a draft amendment that includes a clause to exclude wealthy households from receiving the NT$10,000 cash handout.
The proposed amendment might include adjustments to make the special budget more effective and in line with the nation's fiscal structure, government policy priorities, and the methods of communication between the ruling and opposition parties. The Cabinet official did not specify when the amendments would be proposed.
The US has announced 20% tariffs on Taiwanese goods, which could impact the industries differently from what was expected when the special act was proposed in April. The Executive Yuan believes that the legislature passing an act that significantly increases government spending without prior discussion with the Executive Yuan is unconstitutional.
President William Lai has promulgated the special act, which requires the implementation of the universal cash handout before Oct. 31. The Executive Yuan is expected to approve the special budget on Thursday and forward it to the legislature for review.
The mass recall of KMT lawmakers failed on Saturday last week, and some Democratic Progressive Party members considered the government's hesitance regarding the cash handout as a reason for the failure. The Cabinet might also propose amendments to make more tangible, effective adjustments in accordance with the nation's fiscal structure, government policy priorities, and the methods of communication between the ruling and opposition parties.
- The Constitutional Court review, requested by Taiwan's Cabinet, will address the argument that the cash handout provision in the special act contradicts the Constitution.
- The proposed amendment to the special budget, which includes a clause to exclude wealthy households from receiving the NT$10,000 cash handout, may also aim to align the budget with the nation's fiscal structure, government policy priorities, and the methods of communication between the ruling and opposition parties.
