410,000 won vs. 830,000 won per person... Taiwan’s ruling and opposition parties vie to hand out cash ahead of local elections

[Financial News] Taiwan’s ruling and opposition parties have begun competing to provide cash to the entire population ahead of next month’s local elections.
Local media reported on the 15th that the Kuomintang (KMT), the main opposition party, plans to pass a special ordinance bill for an “AI Bonus” through the Legislative Yuan before the local elections on the 28th of next month. It has set the payment at NT$20,000 per person (about 830,000 won).
President Lai announced back in August that, with Taiwan’s economic growth rate expected to reach its highest level in 39 years this year, he would allocate an additional NT$235.7 billion (about 9.7 trillion won), provided revenues and expenditures were balanced and there was no actual borrowing, and pay NT$10,000 (about 410,000 won) to every citizen.
The KMT maintains that this year’s excess tax revenue should be returned within the year, separately from the government’s proposal. It argues that the excess revenue exceeds NT$1 trillion (about 41 trillion won), making it possible to fund the payments without issuing government bonds.
Taiwan’s Ministry of Finance, however, has expressed reservations, saying that implementing the proposal would cost at least NT$470 billion (about 19 trillion won), making borrowing unavoidable and crowding out budgets for existing projects.
The ruling Democratic Progressive Party (DPP) has also responded by calling for the swift passage of a bill to pay NT$10,000 to every citizen. President Lai Ching-te plans to allocate additional funds, subject to a balance between revenues and expenditures and the principle of no borrowing, and pursue payments before the Lunar New Year.
As the opposition’s proposed payment is twice the amount in the ruling party’s plan, conflict between the parties over whether and when the proposal will actually pass is expected to be unavoidable.
The Taiwan Legislative Yuan currently has 113 seats: 52 held by the KMT, 51 by the DPP and 8 by the Taiwan People’s Party (TPP), leaving the opposition with a majority. If the KMT and TPP cooperate, they can force through the NT$20,000 payment plan, though there are concerns that the premier could refuse to sign it.
[email protected] Seong Min-seo Reporter