Taiwan to borrow NT$516.2bn for next year's budget

The government will take out a record NT$516.2 billion (US$15.936 billion) in loans next year after Premier Wu Den-yih (吳敦義) yesterday revealed the central government’s revised budget statement request for 2010.

Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Shih Su-mei (石素梅) told a press conference that government debt was expected to reach NT$4.635 trillion by the end of next year, or 36.53 percent of the average GNP of the previous three years.

With NT$267.1 billion to be raised in a special budget request — NT$54.9 billion for post-typhoon reconstruction, NT$192.2 billion for the four-year economic stimulus plan and the NT$20 billion for water management projects at Shihmen Reservoir (石門水庫) and flood-prone areas — NT$249.1 billion, or 14.3 percent of next year’s annual expenditure, will be borrowed.

SHORTFALL

NT$183 billion will meet the shortfall between annual expenditure and income and NT$66 billion will go to pay off the principle on exisitng government debt.

The adjusted central government budget for next year still projects annual revenues at NT$1.552 trillion, but the Wu Cabinet trimmed projected government expenditure by NT$4.8 billion to NT$1.7398 trillion.

Shih said the reduction in expenditure was a response to calls that the government should conserve its savings and rein in its expenses in view of its fiscal woes.

Spending on education, science and cultural development accounts for the lion’s share of government expenditure for next year at 20.3 percent, followed by social welfare spending at 18.8 percent, defense expenditure at 16.6 percent and spending on economic development at 12 percent.

DEFENSE

Defense expenditure will make up 2.99 percent of the country’s GDP, almost meeting the government’s commitment to raise the amount to at least 3 percent of GDP.

The Cabinet meeting yesterday also approved a proposal aimed at creating job opportunities for typhoon victims.

If companies undertaking post-typhoon construction on the government’s behalf fail to preferentially hire typhoon victims, the government will reduce their quota of migrant workers as a punishment, Council of Labor Affairs Minister Jennifer Wang (王如玄) said.

ADDITIONAL REPORTING BY CNA