Taiwan’s Premier Cho Declines to Countersign Budget Amendments

Taiwan’s Premier Cho Jung-tai announced on December 6, 2023, that the Cabinet will not countersign amendments to the local revenue-sharing law approved by the Legislative Yuan last month. This decision, according to Cho, aligns with constitutional obligations aimed at protecting the integrity of Taiwan’s governance.

The amendments to the Act Governing the Allocation of Government Revenues and Expenditures were designed to increase the share of central government revenue allocated to local governments. However, the Cabinet expressed concerns that these changes would significantly strain national finances, potentially leading to an additional NT$264.6 billion (approximately US$8.43 billion) in debt for the upcoming fiscal year. This figure far exceeds the borrowing limit stipulated by law, which caps annual borrowing at 15 percent of total expenditure.

Cho stated that this refusal marks a historic move, as it is the first instance in which the Cabinet has declined to countersign legislation. He emphasized that the decision was made to uphold the Constitution and ensure responsible governance amid what he described as a lack of proper consultation from the opposition parties.

The rejection of the Cabinet’s request to reconsider the amendments occurred on December 5, when the opposition, primarily composed of the Chinese Nationalist Party (KMT), the Taiwan People’s Party (TPP), and independent lawmakers aligned with the KMT, voted against it by a margin of 59 to 50. In light of this, Cho remarked that if lawmakers pursue a no confidence motion against him for his stance, he would consider it a “democratic badge of honor.”

In the event that such a motion passes, Cho would have ten days to resign or could request President William Lai to dissolve the legislature, prompting new elections within 60 days. Lai had previously urged Cho to consider the implications of not countersigning the amendments, stating that doing so would prevent the law from taking effect even if signed by the president.

During a tea gathering earlier that day, Lai emphasized the importance of ensuring that all ministries and agencies operate within a constitutionally sound framework, particularly in light of recent legislative actions that have raised concerns about the Constitutional Court’s functioning.

The Legislative Yuan has faced criticism for passing several contentious bills, including the revenue-sharing amendment and legislation on pension cuts. Notably, the Constitutional Court has been rendered ineffective since January due to a new requirement mandating a quorum of ten grand justices for deliberations, with only eight currently serving.

In a follow-up statement, the Presidential Office reiterated Lai’s warnings regarding the potential fiscal risks associated with the revenue-sharing amendments. Presidential Office spokesperson Karen Kuo stated that these revisions could undermine fiscal sustainability, distort revenue allocations, and weaken the government’s ability to respond to national security challenges and natural disasters.

This situation underscores the growing tensions between Taiwan’s executive and legislative branches, as differing views on fiscal policy and governance continue to shape the political landscape. As this issue unfolds, the implications for Taiwan’s governance and financial stability are likely to remain a focal point of discussion.