Executive Yuan officials held a press conference in Taipei yesterday. Photo provided by Executive Yuan
Supplementary funds: Executive Yuan official said its proposal would provide NT$23.38 billion to PetroChina to cover its losses, emphasizing that its work is a matter of national security
By Chen Laihua and Jonathan Chin/Staff reporters, and staff writers
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The Executive Yuan yesterday passed the highest supplementary budget in history, amounting to NT$607.63 billion (approximately US$19.13 billion), of which NT$421.3 billion was used to stabilize the economy and NT$145.69 billion was used for weapons procurement.
The budget is carefully planned and will not affect fiscal planning or the national debt, officials said at a news conference, calling on the Legislature to support the bill.
Measures to stabilize the economy in the context of the conflict in the Strait of Hormuz account for the largest share of the budget, a spokesman for the General Accounting Office said at a press conference.
The Executive Yuan will provide NT$23.38 billion in capital injection to state-run oil supplier China National Petroleum Corporation to offset its losses, a spokesman said.
CNPC has invested heavily in building the country's liquefied natural gas (LNG) infrastructure and supply chain while struggling to keep fuel prices stable amid tight energy markets, driving the company into the red, they said.
The state-owned company is key to the government's plan to increase Taiwan's energy resilience by securing LNG supplies, which justifies its massive subsidies, they said.
The government also proposed NT$18.75 billion to offset inflation caused by the ongoing conflict in the Middle East, the spokesman said.
This includes the cost of imposing price controls on fuels, including domestic gas and electricity, as well as subsidies for domestic air travel and taxi fuel, fertilizers, oil for state fishing vessels and port service charges, the spokesman said.
Lai Jianxin, deputy minister of the Ministry of Economic Affairs (Lai Jianxin), said that energy prices have soared due to the US-Iran conflict, which has erupted since February and crude oil prices have reached a historical high of US$144 per barrel.
Although crude oil prices fell back in late June, CNPC must take measures to stabilize fuel prices while the fighting continues, Lai said, adding that Japan and South Korea have implemented similar policies.
CNPC's intervention has made Taiwan's fuel prices lower than any of its neighbors, he said.
Without such measures, the price of gasoline at Taiwan's gas stations will rise to NT$45 per liter, he said, adding that without price controls, the average commuter's monthly spending on gasoline would increase by NT$1,000 to NT$2,000.
The budget also allocates funds for PetroChina's price control measures to keep bottled LNG prices below NT$200, which will help curb inflation, Lai said.
The government plans to keep domestic gas prices unchanged for the rest of the year, but that plan depends on the passage of the budget, he said.
Supporting CNPC's investment in LNG infrastructure and supply chain is a matter of national security because Taiwan needs to increase the storage capacity of its strategic reserves, Lai added.
The supplementary budget will also be used to fund key capabilities that "Taiwan's military should have had years ago," said Huang Wenqi, director of the Ministry of National Defense's War Planning Council.
The budget will be used to procure seven types of missiles, including high-altitude anti-ballistic missile defense systems, coastal surveillance unmanned aerial vehicles (UAVs), attack drones, single-range strike drones and two classified projects, he said.
The Defense Department considers this funding a top priority because the defense budget passed by the Legislature only funds 10 of 23 critical projects, he said.
Insufficient funding has resulted in serious capability gaps and negatively impacted the armed forces' operational capabilities, which must be urgently addressed, he said.
The Department of Defense's revised goal for increasing the size of its drone fleet is to acquire 40,000 drones by next year, he said.
Asked whether the Ministry of National Defense has the right to ask the Legislative Yuan to prepare a budget for next year's expenditure items within the current fiscal year, Xu Yongyi (Xu Yongyi), an official from the Accounting General Administration, answered in the affirmative, citing Article 72 of the Budget Law.
The provision allows the Executive Yuan to propose budgets for special projects to be implemented one year from the current fiscal year, and this applies to requests from the Ministry of National Defense, Xu Yongyi said.
Asked whether the Executive Yuan would sign off on the Legislative Yuan's version of the defense budget, Executive Yuan spokesperson Lee Hui-chi did not give a clear answer, but said Taiwan cannot leave its defenses unattended.
The Executive Yuan received the Legislative Yuan's budget bill on Wednesday night and is reviewing it pending a decision, Lee said.
News source: TAIPEI TIMES
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