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Government will spend up to US
$3.7 billion to lift sagging economy
Taiwan's Cabinet announced yeste rday it would spend up to 120 billion New Taiwan dollars (US$3.7 billion) in a comprehensive package aimed at lifting the sagging economy.
The package, which seeks to boost domestic demand and encourage energy-saving investment, includes measures like offering interest-free housing loans to newlyweds and subsidies to companies hiring new workers.
Chen Tain-jy, chairman of the Council for Economic Planning and Development, said the measures would help Taiwan achieve the 4.3 per cent economic growth projected for 2008. Taiwan earlier had forecast 4.78 per cent growth but lowered the figure after recording a rare trade deficit in July amid soaring oil prices and the continuing global economic downturn.
As part of the economic package, the Cabinet proposed to halve the securities transaction tax to 0.15 per cent for a period of six months in the wake of a prolonged financial market slump. Taiwan's benchmark share index fell 26 per cent in the first eight months this year. The opposition Democratic Progressive Party said it would not support the securities transaction tax cut because doing so would further worsen the budget deficit. The tax cut is expected to be passed with the support of ruling Nationalist Party lawmakers.