Budgetary Review and Public Finance
What the section tests
Budgetary review tests the constitutional and statutory rules governing the budget, legislative review, and public finance.
Core rules
- Constitution Art. 70: the Legislative Yuan may not increase expenditure in the budget bill.
- Budget Act (預算法): general, special, and supplementary budgets; fiscal year; preparation and approval.
- Review stages: committee review, caucus negotiation, second and third reading.
- Special budgets: limited to statutory purposes such as major disasters, national security, and economic development.
- Budget vs statute: the budget bill authorises spending but cannot create new substantive obligations.
- Fiscal discipline: debt ceilings, deficit rules, and transparency; audit by the Control Yuan.
Worked example
A legislator proposes adding a new subsidy in the budget bill. The amendment increases expenditure, so it violates Art. 70. The correct route is a separate statute creating the subsidy and a legal basis for the expenditure. A budget freeze is different: it restricts execution but does not create a new entitlement.
Traps
- Thinking the legislature can increase spending.
- Confusing a freeze with a cut.
- Approving a special budget without statutory conditions.
- Ignoring the difference between budget and statute.
- Overlooking debt-ceiling rules.