Military spending to increase 16.4% next year
The Cabinet approved a 4.4 percent increase in government spending for next year with more than a fifth of the NT$1.7 trillion budget earmarked for Taiwan's growing military program.
The budget approved by the Cabinet yesterday morning projects a NT$97.9 billion deficit in 2008 based on an estimated 7.6 percent rise in government revenues to NT$1.6 trillion, the Directorate General for Budget, Accounting and Statistics said.
The budget still requires legislative approval, but its military spending provisions could make that difficult.
The government has requested a defense funding increase of 16.4 percent to NT$341 billion, and includes NT$19.2 billion to purchase military hardware such as P-3C Orion anti-submarine patrol aircraft and NT$10 billion to purchase fighter jets.
The Legislature didn't pass the 2007 budget until June, in part because of disputes over a weapons package offered by the United States in April 2001, which has been in limbo in the lawmaking body since approved by the Cabinet in June 2004.
Taiwan is boosting defense spending to keep up with China, whose defense budget rose a record 17.8 percent to 350 billion yuan (US$46 billion) this year.
Defense accounts for the largest share - 20.1 percent - of Taiwan's spending plans for next year.
Education will claim the second largest slice of the budget, with NT$318 billion earmarked, up 2.3 percent from this year, followed by social welfare spending at NT$298 billion, up 0.7 percent. The social welfare spending includes an increase of NT$1.67 billion for elderly welfare subsidies and a new national pension for the handicapped and an NT$8.46 billion increase in living allowances for aged farmers.
Economic development will take the third largest chunk of proposed government spending at NT$202 billion, up 0.8 percent, the DGBAS said.
Some NT$77.3 billion is set aside for the central government's "Project for the Expansion of Public Construction for 2008," which includes NT$15 billion for a center of excellence project for top universities, NT$7.4 billion for national historical and cultural centers, NT$5.6 billion for the M-Taiwan project to enhance the country's telecommunication and internet service infrastructure, NT$6.9 billion for transforming the Taiwan Railway Administration into a short-haul metropolitan mass rapid transit system, NT$9.3 billion for freeway construction, NT$22.7 billion for metro system development in northern, central and southern Taiwan, NT$8.1 billion for sanitary sewer construction, and NT$2 billion for water supply improvement projects.
Although unsubstantial, a potential flash point in the budget is the additional NT$20 million earmarked for the president's state affairs fund that would restore it to its original NT$50 million level. Taiwan's first lady is currently on trial for allegedly misusing the fund, while President Chen Shui-bian (陳水扁) was spared an indictment for the same offense because of his presidential immunity.
In the wake of the allegations, the opposition-controlled Legislature cut the fund by NT$20 million in 2007.
The Cabinet also approved a 10-measure proposal to save energy and develop reusable energy, including encouraging motorists not to drive one day each week, the statement said.