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Published: July 28, 2006
Delegates to the plenary session of the Conference on Sustaining Taiwan's Economic Development, meeting in the afternoon of July 28, 2006, discussed consensuses reached by members of the Panel on Government Efficiency. Broadly, their recommendations for action fall into four broad categories: (1) establishing a government code of ethics and elevating administrative efficiency, (2) strengthening the roles and functions of the central and local governments, (3) reforming financial and economic legal systems and following world trends, and (4) strengthening fiscal discipline, structure, and resource management. These may be summarized as follows:
1. Establishing a government code of ethics and elevating administrative efficiency
a) A comprehensive action plan to fight corruption should be formulated.
b) An independent organization specifically mandated to root out corruption to ensure honest administration should be established.
c) Passage of the revised "Organizational Law of the Executive Yuan" should be expedited.
d) To meet the personnel needs of various departments under the Executive Yuan, changes should be made to civil service examinations in order to expedite the recruiting process for high-echelon civil servants.
e) Various indices, including those for sustainable development and international competitiveness, should be used as references for improving the objectivity of each government agency's evaluation mechanism.
2. Strengthening the roles and functions of the central and local governments
a) The Executive Yuan should convene regular district meetings to which the heads of local governments are invited.
b) When formulating polices for sustaining Taiwan's economic development or recruiting enterprises, the central government should ask the opinion of local governments, provide them with opportunities to participate in the process, and strengthen its efforts to air its policies and solicit views.
c) To strengthen county and city governments' authority over personnel, the scope of hiring political appointees should be expanded.
d) In line with the policy of streamlining government, the pay grades of civil servants of county and city governments should be elevated.
e) Laws should be formulated or revised to empower local governments to develop cross-jurisdictional cooperation through negotiations, administrative contracts, or the establishment of management organizations or administrative corporations.
3. Reforming financial and economic legal systems and following world trends
a) To accelerate economic development, increase administrative efficiency, and ensure fair competition, and by promoting the principle of negative listing, regulatory agencies should invite representatives from business, government, and academia as well as elected representatives to regularly re-evaluate financial and economic laws and regulations.
b) The government should re-examine, as soon as possible, the system of environmental impact assessment with regard to the accuracy of data in the environmental impact assessment report, the efficacy and transparency of the assessment process, and the explicitness of key guidelines.
c) The government should actively promote the development of non-banking financial institutions to accelerate the financial sector's overall development. It should push for the legislation of a law for companies' financing within a set time frame and formulate concrete developmental strategies and plans for non-banking financial institutions, including merchant banks, private equity funds, and asset management companies.
d) The government should adopt a more aggressive attitude in reviewing requirements for hiring foreign professionals and formulating measures for easing related restrictions in order to increase flexibility in utilizing foreign human resources. The government should consider amending the Employment Service Act and other relevant laws and regulations to ease restrictions on hiring foreign professionals, simplify procedures for visa and residence application, and discontinue unnecessary document verification requirements.
e) The quality of arbitration should be enhanced, relevant laws and regulations re-examined, strict standards for the selection of arbitrators formulated, and training in arbitration through hands-on experience strengthened. In addition, it is necessary to establish a mechanism for evaluating arbitrators so as to raise their competence.
f) The government should increase efficiency in settling disputes regarding special and important public construction projects. It should study the establishment of criteria for designating projects as "special" and "important" in order to enhance existing mechanisms' capacities to expedite settlement of disputes over construction projects.
4. Strengthening fiscal discipline, structure, and resource management
a) A thorough study should be undertaken to determine how to integrate tax incentive systems, either by treating such matters exclusively in laws that are under the jurisdiction of the Ministry of Finance to enforce or drafting a single law to cover all types of tax incentives. Further, in accordance with Article 29 of the Budget Act, an expense report on each tax item should be provided.
b) A law to ban granting elected representatives at various levels of government a fixed budget for miscellaneous small projects and other activities should be enacted.
c) In fiscal affairs, the statuses of the governments of counties, provincial municipalities, and special municipalities should be made equal. The scope of redistribution of tax revenues made by the central government to these local governments should be enlarged, while the standard for tax revenue redistribution should be unified.
d) The power of local governments to levy taxes should be increased and regional tax revenues augmented to meet the needs of regional development.
e) The efficiency of utilizing existing social resources should be examined and the resources of the private sector as well as market mechanisms effectively integrated in order to establish a stable fiscal and budgetary system. This would allow for expenditures on social welfare to be increased appropriately each year, which would be conducive to promoting various social security policies.
f) Government asset management must be made effective to improve financial efficacy. The possibility of instituting a pay-for-use system of leasing arrangements between government agencies should be studied to establish a cost calculation system for optimizing utilization of government property.
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