TAIPEI: Taiwan's new "cabinet" yesterday proposed a 2010 government budget yielding a shortfall of NT$183 billion ($5.65 billion), which is smaller than a previous proposal but bigger than the shortfall for 2009.

The general budget deficit for 2010 will be smaller than the previous plan's NT$187.8 billion, while representing a second shortfall in a row.

The "cabinet" formed earlier this month kept its government revenues for next year unchanged from an earlier proposal of NT$1.552 trillion, which is down 7.2 percent from this year, the statistics agency said in a statement.

However, it cut its general expenditure for next year, as expected, to NT$1.735 trillion from NT$1.7398 trillion previously, as the new "cabinet" aimed to control its deficits during tough economic times.

The newly proposed spending for next year will be down 4.1 percent from this year, the island's chief statistician Shih Su-mei told a news conference.

"We hope every department can work toward overcoming the shortfall," Shih said.

Last year, the government logged a deficit of NT$136.5 billion, statistics agency data showed.

Taiwan finance chief Lee Sush-der also said on Wednesday that the "ministry" had an overall tax reform plan, such as improving management of the government's assets, to raise government revenues by about NT$1 trillion from now through 2016.

As part of the proposed budget, defence spending would drop about 9 percent to NT$288.7 billion, following Taiwan's improved ties with the mainland.

But defence spending next year, like this year and last, should equal about 3 percent of Taiwan's GDP, Shih said.

The "cabinet" also proposed two special budgets.

One, worth NT$120 billion over three years, would fund the recovery from Typhoon Morakot that hit Taiwan in August and killed more than 600 people. The other, worth NT$192.2 billion, is for public infrastructure and economic stimulus.

The "cabinet" will immediately send its proposed budget to "parliament" for possible revisions and eventual approval.

Reuters

(HK Edition 09/25/2009 page2)