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Defense budget lowest
of Ma years
BALANCING THE BOOKS: With a significant decrease
in projected tax revenues for next year, the government is planning to sell
state-owned shares to raise revenue
By Shih Hsiu-chuan / Staff reporter
The Cabinet yesterday approved the government¡¦s annual budget for next year,
with NT$305.9 billion (US$10.2 billion) set aside for defense, the lowest in
terms of share of GDP since President Ma Ying-jeou (°¨^¤E) came to power in 2008.
Despite a pledge by Ma when he was running for office that year to increase
defense spending to above 3 percent of GDP, the amounts allocated by his
administration for defense have steadily declined in recent years.
Under the draft budget, the defense spending budget for next year was 2.54
percent of the projected GDP of NT$14.77 trillion, lower than 2.67 percent in
2011, 2.68 percent last year and 2.71 percent this year.
The proposed budget allocation of NT$305.9 billion for defense projects was an
increase of 0.1 percent, or NT$400 million, compared with this year,
Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Shih
Su-mei (¥Û¯À±ö) said.
In 2009, 3.05 percent of GDP was allocated in the draft budget for defense
spending, the only time more than 3 percent has been allocated for such use in
the Ma era.
In the end less than 3 percent of GDP was spent, the year-end audit report
showed, Shih said.
With a significant decrease in projected tax revenues next year, the government
plans to sell state-owned shares. Shares of Taiwan Semiconductor Manufacturing
Co (TSMC), Chunghwa Telecom Co, Mega Financial Holding Co, Taiwan Cooperative
Bank (TCB), China Steel Corp and Taiwan Fertilizer Corp are scheduled to be made
available.
It will be the first time in five years that the government will try to collect
revenues through the sale of state-owned shares, which is expected to bring in
revenue of NT$44.1 billion, Shih said.
Shih said that the shares will only be released to three of the nation¡¦s four
major funds ¡X the Labor Insurance Fund, the Labor Pension Fund and the Postal
Savings Fund ¡X rather than to general investors to avoid market fluctuations
while maintaining the government¡¦s control of those companies.
The budget statement for next year projects revenues of NT$1.7333 trillion, a
decline of NT$2.5 billion, or 0.1 percent compared with this year, and
expenditure of NT$1.9407 trillion, a year-on-year increase of NT$33.1 billion,
or 1.7 percent.
To meet the shortfall of NT$209.9 billion and a required repayment of NT$64
billion, the government would take out loans of NT$273.9 billion next year.
The government has earmarked NT$192.5 billion in public construction projects
for next year, an increase of NT$17.5 billion, or 10 percent, compared with this
year, to stimulate economic growth, Shih said.
The DGBAS said the government¡¦s outstanding debts would rise to an all-time high
of NT$5.4 trillion, or 38.7 percent of the average GNP for the past three years,
still lower than the 40 percent debt limit.
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