The Executive Yuan is to unveil the central government’s general budget for the next fiscal year in a Cabinet meeting on Aug. 20, which might include President William Lai (賴清德) committing to allocating 3 percent of the nation’s GDP to defense spending, a source said yesterday.
Although the Legislative Yuan has not yet passed this year’s central government general budget, the Executive Yuan is already compiling the general budget for next year, they said, adding that the Directorate-General of Budget, Accounting and Statistics (DGBAS) last week reported on it to Lai and Premier Cho Jung-tai (卓榮泰).
Lai is expected to hold a news conference on the budget plan once it is finalized, while the Executive Yuan is scheduled to approve it on Aug. 20, the source said.
Photo: Chung Li-hua, Taipei Times
The president is also expected to reiterate his commitment to raising defense spending to 3 percent of GDP, the source added.
Next year’s central government budget is expected to feature expanded spending, including higher defense allocations.
Lai’s population strategy, announced on the second anniversary of his inauguration, would also likely receive an extra NT$205 billion (US$6.35 billion) next year, bringing total funding to NT$380 billion, they said.
Taiwan’s solid economic growth supports higher government spending, the source said, adding that annual expenditure growth had previously reached 20 percent.
However, this year’s increase would be constrained by amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法), they added.
As for the defense budget, the Executive Yuan had proposed a budget of NT$949.5 billion, or 3.32 percent of GDP — which meets the NATO defense spending target of at least 3 percent of GDP — but opposition parties ultimately trimmed it to just NT$8.8 billion, the source said.
It included veteran retirement payments and Coast Guard Administration expenditures, they added.
This year’s defense budget was benchmarked against last year’s GDP estimate of NT$28.6 trillion, but the DGBAS has estimated that GDP this year would be NT$33.5 trillion, so defense spending should exceed NT$1 trillion to meet the NATO standard, the source said.
However, opposition parties have blocked the defense budget, slashing the special defense bill from NT$1.25 trillion to NT$780 billion, and boycotted the proposed five-year NT$210 billion budget to fund the development of domestic drones and uncrewed aerial vehicles (UAVs), they said.
The parties also introduced a draft bill to include funding for domestic UAV development in the annual general budget instead, the source said.
Meeting the defense budget might prove to be challenging, they said, adding that to reach the 3 percent defense spending target, Taiwan would have to use last year’s GDP as its basis for the calculation, rather than using a fluctuating annual figure.
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