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New Taipei City to issue city treasury bonds
Publication Date : 09-07-2014
The New Taipei City Government yesterday announced the city government's plan to issue city treasury bonds as early as August in order to relieve the city's budget shortage. Currently, the city's annual expenditure exceeds 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 as a reference, the issuing mechanism for the bonds will seek to distribute NT$10 billion (US$334 million) to the private sector.
As opposed to applying for loans from banks, said a city government representative, the bonds have lower interest rates, easing the interest burden on the finances of the New Taipei City Government. If plans push through, New Taipei City would be the first local government in Taiwan to distribute city treasury bonds.
According to New Taipei City Government Department of Finance Commissioner Lu Wei-chin, the city's annual revenue 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.
The Issuing of City Treasury Bonds Autonomous Regulation was also passed in 2011, said the commissioner.
During the New Taipei City Municipal Meeting yesterday, New Taipei City Mayor Eric Chu said 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 progress in the amendment to the Act Governing the Allocation of Government Revenues and Expenditures and the Act Regulating Automotive Fuel Use Fee Collection and Allocation.
The failure to introduce amendments to acts has resulted in 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.