Fri, Jun 04, 2004 - Page 3 News List

Arms procurement budget `meets legal requirements'

By Ko Shu-ling  /  STAFF REPORTER

The Cabinet yesterday sought to allay public concern about the NT$614 billion (US$18.4 billion) special budget for arms procurement from the US, saying the budget would not push the government's total outstanding public debt past the legal limit.

"Even at its peak in 2008, the government debt is estimated at 39.9 percent [of GDP], or 0.1 percent below the legal limit. The figure will then decrease on an annual basis to 34.9 percent in 2017," Hsu Jan-yau (許璋瑤), director-general of the Cabinet's Directorate General of Budget, Accounting and Statistics (DGBAS), told a press conference yesterday afternoon.

According to the Public Debt Law (公債法), the central government's total outstanding public debt may not exceed 40 percent of the average GNP for the previous three years.

special budget

The Cabinet on Wednesday approved a special budget of NT$614.1 billion for procuring arms from the US, pending further review and final approved by the legislature.

The money is to be spent over the next 15 years. A total of NT$412 billion would be earmarked for eight diesel-electric submarines, NT$145 billion for six Patriot anti-missile systems, NT$53 billion for 12 P-3C anti-submarine aircraft and NT$700 million for the land handling fees.

While the Cabinet plans to issue bonds to raise NT$420 billion, NT$100 billion would come from selling public property belonging to the Ministry of Defense and NT$94 billion from selling shares in state-owned enterprises.

If approved by the legislature, Hsu estimated that the government would have to borrow an average of NT$190 billion per year for the following 15 years. The government borrowed NT$210 billion last year.

optimistic

Hsu added that the Cabinet will have reason to be optimistic if tax revenue and economic growth continue to surge at their present rates.

According to Hsu, tax revenue between January and April this year show a 21 percent increase compared with the same period last year.

Even if this figure were only 11 percent, Hsu said, the government could still expect to collect over NT$903 billion in tax money next year.

The government's tax revenue will also be boosted by several tax reforms and policies which take effect this year, Hsu said.

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