TAIWAN PREMIER EXPERIENCING SAME LEGISLATIVE

C O N F I D E N T I A L AIT TAIPEI 000941 SIPDIS SIPDIS STATE PASS USTR STATE FOR EAP/TC, USTR FOR ALTBACH AND WINELAND, USDOC FOR 4431/ITA/MAC/AP/OPB/TAIWAN/JDUTTON TREASURY ALSO PASS TO FEDERAL RESERVE/BOARD OF GOVERNORS, AND SAN FRANCISCO FRB/TERESA CURRAN E.O. 12958: DECL: 01/25/2010 TAGS: ETRD ECON PREL PGOV TW SUBJECT: TAIWAN PREMIER EXPERIENCING SAME LEGISLATIVE PROBLEMS AS PREDECESSOR REF: A. TAIPEI 189 ¶B. TAIPEI 711 Classified By: AIT Deputy Director David Keegan for reasons 1.5 (b),(d ) ¶1. (SBU) SUMMARY: Premier Su Tseng-chang outlined his Cabinet's priorities during a brief courtesy call by AIT Acting Director Keegan March 9. There were no surprises in his list, headlined by pocket-book issues, but the meeting underscored that the legislative gridlock between the ruling and opposition parties experienced by the previous cabinet continues to this day. END SUMMARY. Courtesy Call on Premier -------------- ¶2. (U) AIT Acting Director paid a courtesy call on Premier Su March 9, asking for Su's views on his priorities. Su listed them as: ¶1. Boosting Economics ¶2. Stabilizing the Social Order ¶3. Serving Social Justice ¶4. Advancing the Interest's of the Disadvantaged ¶5. Pacifying Cross-Strait Relations ¶6. Upholding National Dignity Arms Procurement -------------- ¶3. (SBU) Su lamented that his initial time as Premier is generally being taken up with budget issues. He noted that even though the LY had passed the budget in the previous LY session he has had to devote his time to "defrosting" the budget and seeking LY consent before using budget lines frozen by the LY (Ref A). Su assured us that the DPP will continue to push ahead on the special military procurement bill. He said that the PAC II missile upgrade program is a priority and that he will try to find a way to fund it through either a special budget or the regular annual budget. Su took this opportunity to criticize KMT Chairman Ma Ying-jeou for taking an inconsistent stance on the bill. He was particularly unhappy at KMT accusations that the DPP-led government had been dragging its feet on arms procurement. Su said it is particularly important for Taiwan to show its resolve in taking appropriate preparations to defend itself. Legislative Gridlock Continues -------------- ¶4. (C) Su went on to criticize the opposition party for encroaching on the Administration's constitutional authority. For example, he said, the establishment of the National Communication Commission (NCC) with its composition being determined by the proportion of seats held in the Legislative Yuan is a bad precedent, arguing that every issue should not be determined according to the proportion of seats in the LY. Su stressed that he was prepared to work hard and would look for every opportunity to make progress and break the stalemate with the opposition parties. He said that he had opposed the planned March 18 DPP rally fearing it would further stoke political tensions in the LY, and when his opposition proved unavailing, he urged that at least the size of the rally be reduced. (Comment: In the end, Su attended the March 18 rally, which had a large turn-out of a hundred thousand or more people. End Comment.) Financial Sector Reform -------------- ¶5. (SBU) Asked about the second stage of financial reform, Su said his cabinet would continue working on this issue, including tax reform, but that the range and speed of the reform plan is still under evaluation. He said that Vice Premier Tsai Ying-wen will supervise the financial reform program. Having completed a full day of LY interpellations the day before, Su was very much up to date on the issue of card slaves (Ref B). He said there are two sides to this issue. One is the health and safety of the banking sector and the other is a social issue. He complained that the media had published fabricated stories that sensationalized the problems of card slaves, who themselves bore some degree of responsibility for their predicament. On the banking side he noted that the risks to the banking sector are not as severe as described in many media reports; he emphasized that the banks are in good shape. For the social issues, he said the government will offer assistance to card slaves meeting certain conditions while working to prevent people from exaggerating the situation. ¶6. (C) Comment: Su's comments broke no new ground on bilateral or other issues. His predecessor departed in the midst of LY-EY acrimony (ref A) over the budget and Su seems to be picking up in the same place. Though brief, the courtesy call suggested that Su was not particularly optimistic about prospects for a positive working relationship with the opposition parties. End Comment. YOUNG