The Cabinet yesterday approved a NT$410 billion (US$12.6 billion) special budget to enhance national security and boost economic resilience against the effects of US tariffs.
Based on the Cabinet’s proposal, it would earmark an additional NT$5 billion on top of the NT$88 billion package it approved earlier this month to help local businesses tackle the effects of US tariffs on industrial and agricultural sectors, and to stimulate the economy.
About NT$100 billion of the special budget would be earmarked for Taiwan Power Co (Taipower, 台電), Premier Cho Jung-tai (卓榮泰) told a news conference yesterday.
It represents the latest efforts by the government to lend a hand to the state-owned utility company, after legislators failed to endorse a NT$100 billion capital injection plan for Taipower.
Taipower is under mounting pressure to raise electricity rates to address massive losses of NT$420 billion accumulated through the end of last year.
The new funding would help stabilize the nation’s consumer prices, and shield Taiwanese industries and the broader economy from the potential effects of global economic shocks, Cho said.
Photo: CNA
In addition, about NT$150 billion of the special budget would be earmarked to bolster Taiwan’s national security, such as strengthening coast guard operations, developing uncrewed aerial vehicle infrastructure, and upgrading information and communications systems and facilities, Cabinet spokeswoman Michelle Lee (李慧芝) said.
About NT$167 billion would go toward financing social safety net programs, the Cabinet added.
It said it plans to use the government’s fiscal surplus to fund the special budget, although the proposed bill would allow for borrowing if necessary.
As the government has accumulated NT$358.9 billion in fiscal surplus over eight years as of last year, it does not plan to raise new debt, Cho said.
The budget is subject to the legislature’s approval.
The special budget would allow the Cabinet to allocate NT$410 billion in addition to its annual general budgets over the 33 months to the end of 2027 from March 12, the Cabinet said.
Even after the legislature approves the bill, the Cabinet would have to propose special budget plans and obtain the legislature’s permission to use the NT$410 billion.
The special budget would help push GDP growth to 2.9 percent or higher this year, based on an IMF estimate, Executive Yuan Secretary-General Kung Ming-hsin (龔明鑫) said.
Taiwan’s economy is facing major risks amid global financial uncertainty and GDP could grow less than 2 percent year-on-year this year.
Multiple think tanks have slashed their growth forecast by 0.4 percentage points to 1.5 percentage points due to the US’ 32 percent “reciprocal” tariffs announced on imports from Taiwan, despite a 90-day pause.
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