A 37 percent reduction to all other government projects would be necessary if a controversial budget allocation amendment goes into effect and the defense budget remains unchanged, Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Chen Shu-tzu (陳淑姿) said today.
The legislature on Dec. 20 passed the third reading of amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) that would require the central government to reallocate NT$375.3 billion (US$11.49 billion) of the federal budget to local governments.
After deducting legally mandated expenses, the amendments could cut spending for programs — including the national defense budget — by up to 28 percent, Chen told a meeting of the legislature’s Finance Committee today.
Photo: Tu Chien-jung, Taipei Times
However, if cuts are not made to the national defense budget, funding for other projects — including rent and labor insurance subsidies — could be slashed by up to 37 percent, she said.
The central government’s legally mandated expenses for next year should be compiled and accounted for before cutting public spending, Taiwan People’s Party Legislator Chang Chi-kai (張啓楷) said.
When Chen was in charge of the budget for the Tainan City Government, the city also supported the proposed amendments, Chinese Nationalist Party (KMT) Legislator Lin Te-fu (林德福) said.
At that time, Tainan had already reached its upper threshold for debt under the Public Debt Act (公共債務法) and struggled to pay wages, but now the financial situation across all counties and cities has changed, with many now running a surplus, Chen said.
The new amendments could impact major projects and policies of the central government, and create issues in compiling the 2026 fiscal budget, she said.
Next year’s central government budget is NT$3.13 trillion, with about 58 percent untouchable, leaving 42 percent, or NT$1.32 trillion, that must be cut by up to 28 percent, Chen said.
The cuts would make it difficult for important and ongoing projects to continue, impacting the budgets for national defense (NT$295 billion), labor insurance subsidies (NT$120 billion), rent subsidies (NT$40 billion) and projects addressing the low birthrate (NT$34.6 billion), Chen said.
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