Taiwan’s Special Defense Budget Act (軍購特別條例) debate should begin with a basic procedural distinction: A legal authorization ceiling is not the budget itself.
A special act does not immediately spend every dollar it authorizes; it only creates the legal basis, scope and upper limit for the Executive Yuan to later submit concrete budget proposals to the Legislative Yuan for review.
This distinction matters because the opposition has blurred legal authorization with budget review.
Legislators could cut items, freeze allocations and demand reports when examining specific programs, prices and procurement plans.
However, writing such restrictions into the legal source of the budget does not strengthen oversight; it pre-empts execution.
The Chinese Nationalist Party (KMT)-Taiwan People’s Party (TPP) version of the NT$780 billion (US$24.9 billion) act shows this problem clearly.
On paper, it appears to support national defense by authorizing a larger procurement amount. In practice, it divides the amount into rigid stages and imposes constraints before detailed budget items are even submitted.
The law would not merely supervise future procurement; it could block procurement before real review begins.
The first difficulty is the NT$300 billion ceiling for the first stage.
The act caps five US arms procurement items and only allows flexibility for exchange-rate fluctuations.
However, foreign military sales could also change because of package adjustments, support systems or delivery arrangements.
Taiwan has seen this gap before: Cases such as the M109A7 howitzer and HIMARS showed that US congressional notification figures are not always the same as final formal offers.
If the final offer exceeds the cap for reasons other than exchange rates, the law provides no clear solution.
The second difficulty is that the NT$480 billion second stage is locked by both time and category.
It could only be used for US-approved items within one year after the act takes effect, and only for listed categories such as counter-drone systems, air and ballistic missile defense and anti-armor missile stock replenishment.
If Washington approves an urgent sale later, or if the system falls outside these categories, the special budget could not be used.
Yet Taiwan urgently needs command, control, communications, cyber, intelligence, surveillance, and reconnaissance, electronic warfare or logistics integration.
The passed act should not assume that future threats would fit neatly into a one-year window or a short statutory list.
Moreover, the attached resolution reveals the same procedural confusion.
It requires the Executive Yuan to include Taiwan-US jointly developed or procured equipment and systems in the FY2027 budget, while the act itself mandates annual review.
In effect, a medium- to long-term program that should be implemented through a special budget is being divided into yearly approvals by the Legislative Yuan.
This weakens the long-term demand signal that defense industries need before expanding production.
Companies do not build new production lines, invest in equipment or reorganize supply chains based on commitments that could be renegotiated every year.
A one-year review model might appear cautious, but it cannot create the policy incentives needed to expand defense production capacity.
Alas, the core problem is not whether the Legislative Yuan should exercise oversight, but when and how.
Legislators should first establish a feasible legal framework, then scrutinize actual budget proposals by demanding explanations, freezing questionable allocations or reducing spending where necessary.
Oversight should improve execution, not paralyze it before implementation begins.
Taiwan’s security environment requires speed, flexibility and credibility, while still preserving the legislature’s full authority to review the actual budget.
In the end, a defense act that looks supportive but cannot be executed is not real support for national defense.
Taiwan needs legislation that enables capability-building and sends long-term demand signals, not legislation that pre-emptively freezes procurement.
The opposition should use its budget-review powers at the budget-review stage instead of turning the legal foundation for defense procurement into Taiwan’s first obstacle.
Gahon Chiang is a congressional staff member in the office of DPP Legislator Chen Kuan-ting, focusing on Taiwan’s national security policy.
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