Legislator Weng Chung-chun "Hong Chun-pei Culture and Education Foundation" Public-Interest Lecture

(Taiwan Business News) People often sense that there are all sorts of problems and flaws in the government's budget formulation. Do the legislators who hold the power to cut the budget truly and diligently safeguard the people's tax money? Beyond that, in the Legislative Yuan's budget review process, what kind of interest exchanges take place?

On February 15, the Hong Chun-pei Culture and Education Foundation invited Legislator Weng Chung-chun to speak on "Budget Review for the Benefit of the Nation and the People." Among those known as finance-and-economics legislators, the KMT's Weng Chung-chun is one of the few who has long devoted himself to budgets. Drawing on his many years as a legislator, convener of various committees, and his outstanding performance in budget review, Legislator Weng discussed budget review, and the public benefited greatly.

Legislator Weng Chung-chun's Public-Interest Lecture: Budget Review for the Benefit of the Nation and the People

Looking at a budget is not just looking at numbers. The government issues an administrative report every year. If the policy priority is to improve environmental quality, there must be supporting public policies - concrete ones such as how to handle garbage or make gasoline cleaner. These policies express the governing philosophy, but without budget allocations or without budget being set aside, there is in fact no way to carry out the entire governing philosophy. So the importance of the budget lies not in the numbers, but in seeing from the budget structure whether the government's governing philosophy, or its public policies, are actually being implemented.

The budget is the foundation of government administration, and reviewing and deciding on budget bills is the best way for the Legislative Yuan to oversee government administration. The "Central Government General Budget Bill" is a case just like a legal bill. Every year before the end of August, each ministry and commission prepares its budget, and on September 1 sends the budget to each legislator's office. So the time legislators have to read the budget documents is only a short three months each year, from September 1 to December 31.

There are several important terms in budget review: a "budget bill" is what the Executive Yuan initially sends in, and it has not yet gone through the second and third readings; once it has gone through the second and third readings, it is called the "statutory budget." In addition, during budget review, some budgets are those for which the law explicitly provides that funds must be appropriated or set aside - these are also "statutory budgets"; legislators cannot delete these budgets.

According to Article 6 of the statutory procedure for reviewing the budget, the "Central General Budget Bill Review Procedure," the review reports of each committee must be consolidated by the Finance Committee before they can move on to the next stage (into the chamber); that is, all the committees are in fact only reviewing part of this "one" case, the "Central Government General Budget Bill," so in the end it must be integrated so that this "one" case enters the chamber for the second and third readings.

The Executive Yuan shall submit the general budget bill for the following year to the Legislative Yuan for deliberation four months before the start of the fiscal year; the Legislative Yuan shall decide on it one month before the start of the fiscal year; and the president shall promulgate it 15 days before the start of the fiscal year. With respect to the budget bill submitted by the Executive Yuan, the Legislative Yuan may not propose increases in expenditure, nor may it increase, decrease or shift items between budget accounts. As for the review report on the final accounts, it is submitted by the auditor general.

The formal process is as follows:

1. Placed on the agenda of the Procedure Committee

2. Chamber (first reading): the title is read aloud, officials are scheduled to report, and the bill is referred to the various committees for review (committee referral)

3. Joint meeting of all committees of the whole chamber: decide the groupings and the review dates

4. Review by each committee and reports by officials: entering substantive review

5. Joint meeting of all committees of the whole chamber: send the review results of each committee to the joint meeting for discussion; this is also the start of party negotiations

6. Chamber discussion (second reading): read the issue aloud, discuss item by item and move amendments (P.S. If the chamber resolves to return the general budget bill, then, with the president's approval, the Executive Yuan decides whether to accept it or return it again for a vote; if the second vote fails, by "convention" the premier must resign and step down)

7. Chamber third reading: only textual amendments may be made, no further cuts may be made against individual units, and the general budget is voted on (P.S. If it is rejected at this point, the result is the same as above)

Legislator Weng Chung-chun said that merely reviewing a single case like this often consumes a great deal of time and effort before it enters the second reading, and that the complicated process and specialized knowledge involved are beyond what outsiders can imagine.

After the government budget has been reviewed by the committees, it is not yet final. If a budget deletion proposal is to be raised again, each party caucus and legislator can still propose it before cross-party negotiations. If it is proposed by an individual legislator, it requires the signatures of 15 people to become a case (1+15: 1 person proposes, 15 people sign in support), so most choose to use the party caucus proposal method (the caucus just needs to stamp it and it can be sent out).

The time for each committee to submit budget proposals is not fixed. For the Social Welfare and Environmental Hygiene Committee, for example, proposals must be sent to the committee two days in advance, and then the committee handles printing, preparation of meeting materials, and so on. Only budget proposals passed at the meeting are listed in the minutes.

Budget Trivia: Non-Profit Revolving Funds

If you want to exercise oversight, it is in the non-profit revolving funds. The largest non-profit fund in environmental protection is the air pollution fee, and there is also the resource recycling fund. "Revolving" means cross-year: normally a budget is used in that year, and if it is not used up it must be handed back and cannot be retained; a revolving fund means setting up a fund that can retain some budget for use across fiscal years, and when the surplus exceeds the statutory reserve it must be paid into the treasury.

Both the Budget Act and the compilation and review regulations mention that a non-profit revolving fund should be abolished once its function or purpose has been achieved. Its original purpose was to give everyone flexibility in using budgets across fiscal years.

How is the Environmental Protection Administration's air pollution fee fund used? On many research projects? We must oversee whether it should really be used this way. Non-profit revolving funds have a great many problems, and this is the area where the Legislative Yuan is least able to exercise oversight. First, the Legislative Yuan only appropriates supplementary funds and does not know whether the fund is operating; second, by the time this is usually reviewed it is already the final stage, and the legislators no longer have the energy. The special ties between legislators and the ministries and commissions are all here, so this is a gray area.

In fact, when these funds are used, the controls are not as strict as those for the government budget; generally speaking, accounting is less strict, so cases that are only reported for the record require even tighter oversight.

Legislator Weng Chung-chun Profile

Legislator Weng Chung-chun holds a bachelor's degree from the Department of Journalism at Chinese Culture University, a master's degree from the Graduate Institute of International Business Administration at Chinese Culture University, and a master's degree from the Graduate Institute of Accounting at National Taiwan University. He has served as a member of the 10th and 11th Chiayi County Council, a member of the 1st through 8th Legislative Yuan, convener of the Legislative Yuan's National Defense, Finance, Economics, Transportation and Budget Committees, a lecturer at Tatung Institute of Technology and Toko College of Management, chairman of the Taiwan Nanhai Putuoshan Religious Exchange Association, and founder of the Jen Chien Culture and Education Foundation; he is currently a legislator; he has been rated by the National Watchdog as one of the top ten outstanding legislators, and was rated by the Chenshe and congressional reporters as second best in budget review performance.

Hong Chun-pei Culture and Education Foundation 2014 Public-Interest Lecture