Separating the Executive Yuan’s proposed eight-year NT$1.25 trillion (US$39.21 billion) special defense budget from the general budget would help avoid crowding out spending on public needs, the Ministry of National Defense (MND) said.
The ministry made the remarks in a report to the legislature, delivered ahead of Minister of National Defense Wellington Koo’s (顧立雄) scheduled appearance at the Foreign Affairs and National Defense Committee today to present a special report on military investment planning and fiscal capacity.
Including the defense special budget in the annual budget would limit government fiscal flexibility, the report said, citing the need to prioritize technology to accelerate weapons system modernization.
Photo: Ann Wang, Reuters
Military investment priorities include developing a resilient non-red supply chain and building the “T-Dome” — a proposed multi-layered air and missile defense system designed to integrate air defense assets into a cohesive “shield” over the nation, it said.
Meeting emerging needs over the next eight years is projected to cost NT$1.25 trillion, it said.
The plan covers US military acquisitions, research and development by the Chungshan Institute of Science and Technology, domestic procurement and expansion of military factory production lines. It also involves integrating artificial intelligence-assisted decisionmaking with satellites, radar, various weapons systems, and drones.
In addition to these priorities, the ministry said it has planned long-term military investment projects to maintain defense resilience, including the Land Sword II (陸射劍二), Tien Kung III (天弓, Sky Bow), and Hsiung Feng II and III missiles, upgraded night vision equipment for the army, and runway repair equipment, totaling over NT$70 billion.
Other ongoing projects include the procurement of M1A2T tanks, High Mobility Artillery Rocket Systems, portable short-range air defense missiles, Altius-600M attack uncrewed aerial vehicle (UAV) systems, Harpoon missile coastal defense systems, Patriot missile systems, new advanced trainer aircraft, MQ-9B high-altitude UAVs, National Advanced Surface-to-Air Missile Systems and mobile radar upgrades for battle management, it said.
The expansion of the Zuoying naval base and Kaohsiung-class vessel combat system upgrades are also included, the report said.
Over the next three years, these projects face peak delivery payments estimated at NT$570 billion, it said.
“In the face of imminent military threats, it is essential to ensure the armed forces have sufficient financial resources to build key combat capabilities to protect national sovereignty,” the report said.
Defense spending as a share of total government expenditure has grown from 15.2 percent in 2023 to 18.5 percent this year, it said, adding that defense needs cannot be stably met through the general budget.
A special budget allows the government to allocate funds at once, demonstrating long-term commitment to defense investment, it said.
“The ministry is also promoting defense industry development, encouraging domestic companies to invest and build production capacity, achieving local supply, autonomous production and maintenance goals,” it said.
The special budget is expected to generate about NT$400 billion in economic output and create about 90,000 jobs, supporting local defense and high-tech industries as a new engine of economic growth, it added.
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