Taiwan’s fall would be “a disaster for American interests,” US President Donald Trump’s nominee for undersecretary of defense for policy Elbridge Colby said at his Senate confirmation hearing on Tuesday last week, as he warned of the “dramatic deterioration of military balance” in the western Pacific.
The Republic of China (Taiwan) is indeed facing a unique and acute threat from the Chinese Communist Party’s rising military adventurism, which is why Taiwan has been bolstering its defenses. As US Senator Tom Cotton rightly pointed out in the same hearing, “[although] Taiwan’s defense spending is still inadequate ... [it] has been trending upwards for seven straight years.”
In January, the opposition-led legislature approved a record-high national defense budget of NT$471 billion (US$14.31 billion), accounting for 16 percent of the central government’s annual budget and 2.45 percent of GDP. This marks a 5.2 percent increase from the previous year.
This fiscal year is the first time in eight years that the ruling Democratic Progressive Party (DPP) does not control the legislature, with the Chinese Nationalist Party (KMT) holding a combined majority with the Taiwan People’s Party. Despite the divided government, the nation’s defense budget has reached a record high.
In this budget cycle, the KMT only cut 1.01 percent of the proposed defense budget, the lowest percentage in more than six years. None of the cuts related to US foreign military sales and direct commercial sales were untouched. The percentage cut is less than fiscal 2023 (1.42 percent) — the year following then-US House speaker Nancy Pelosi’s visit to Taiwan and the Chinese People’s Liberation Army military exercises that shocked the nation — and fiscal 2021 (1.36 percent) — the year after Beijing’s crackdown on protests in Hong Kong alarmed the electorate.
The DPP controlled both the government and the legislature during those fiscal years.
Some observers have said that the legislature also froze about 14 percent of the proposed defense budget, with some English-language outlets conflating budget freezes with cuts. However, the freezes are merely temporary and in practice are usually unfrozen in two to three months when specific requirements are met.
Cutting and freezing a portion of the budget are the only two tools for the legislators to perform checks and balances. Taiwan’s legislature wields far less power than the US Congress. It cannot increase spending, limiting the opposition’s institutional ability to express its national defense agenda. It also lacks an appropriations committee to regulate government expenditures.
The legislature also does not have the power to investigate. If the government decides not to provide adequate justification for its proposed expenditures, it can do so with little resistance. If lawmakers are unsatisfied with the lack of transparency and hesitant to approve an unexamined budget, their only recourse is to cut or freeze portions of it. However, this should not be seen as a reflection of Taiwan’s commitment to its own defense.
During the same hearing, Republican Senator Dan Sullivan expressed concern that the KMT’s legislative tactics send the wrong signal. Colby’s 3 percent benchmark and his reference to Trump’s 10 percent defense spending goal for Taiwan have stirred up discussion in Taiwan. The KMT in its repeated communications has stressed its support for a strong defense. However, the party has yet to see an effective spending plan from the government.
If the government clearly communicates its defense spending proposal to the legislature, the KMT would offer its unwavering support. However, the DPP government has never proposed a defense budget large enough to reach 3 percent of Taiwan’s annual GDP after legislative scrutiny. It has also not outlined a clear plan to meet the 3 percent or 10 percent defense spending targets.
Approving the largest-ever national defense budget is our signal.
Howard Shen is assistant director of international affairs for the KMT.
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