The legislature on Friday approved a scaled-down defense budget, a move analysts viewed as a “positive first step,” despite concerns that delays to local defense programs could hurt Taiwan’s long-term military buildup.
The opposition-backed bill has a spending cap of NT$780 billion (US$24.82 billion), lower than the Cabinet’s NT$1.25 trillion proposal. It includes two key funding provisions for US weapons systems: NT$300 billion for sales approved by the US for Taiwan on Dec. 17 last year, and NT$480 billion earmarked for future arms packages expected to be announced by Washington.
Under the bill, approved and future arms sales would need legislative approval before funding could be disbursed.
Source: Executive Yuan and Legislative Yuan
Su Tzu-yun (蘇紫雲), director of the Institute for National Defense and Security Research’s Defense Strategy and Resources Division, described the passage of the bill as a “good start.”
The defense bill reflected the broader power struggle between China and the US, he said.
“Beijing hoped to portray Taiwan as reluctant to strengthen its self-defense capabilities in an effort to convince the US to halt future arms sales,” Su said. “Meanwhile, the US wanted Taiwan to demonstrate its commitment to self-defense through concrete actions, not just slogans.”
Amid the US-China rivalry, Taiwan has assumed the role of a “chess player” rather than a “chess piece” by demonstrating its willingness to support its self-defense despite intense partisan wrangling over the bill, Su said.
Su said he hoped the ruling and opposition parties would also support the local defense industry, preferably through supplementary defense budgets.
“This is not for the government’s own convenience, but to offer manufacturers greater stability when investing in research and development, equipment, and raw materials,” he said.
Without stable financing, Taiwan’s efforts to achieve “defense autonomy” could be hampered, he said, citing as an example the F-CK-1 “Ching Kuo” fighter jet program, which he said suffered from sporadic funding.
The rejection of the Cabinet’s bill eliminated supplementary budget funding for major local defense industry initiatives, including plans to expand Taiwan’s drone production capacity.
National security expert Chen Wen-chia (陳文甲) said the version passed by the Legislative Yuan was more than just a reduction in funding, as it underscores a divergence in strategic thinking between a broader push for comprehensive defense transformation and a more limited approach focused on incremental military upgrades.
The Cabinet’s plan emphasized long-term, full-spectrum deterrence, while the Legislative Yuan’s version favors more constrained and tightly controlled defense spending, he said.
The Cabinet’s proposal focused on the “T-Dome,” bolstering defense resilience, and developing new capabilities such as artificial intelligence (AI) and drones as part of a more system-wide, integrated defense framework, Chen said.
It also showed the dependence of drones on AI, semiconductors, batteries, communications and sensors supply chains, and warned that insufficient domestic demand could slow defense industry development and cause Taiwan to miss opportunities in the reshaping of Indo-Pacific supply chains, he added.
The version passed by the Legislative Yuan concentrates on US arms procurement, including High Mobility Artillery Rocket Systems, self-propelled artillery, and Javelin and tube-launched, optically tracked, wire-guided missiles, he said, adding that it reflected a preference for conventional firepower upgrades and near-term readiness.
The opposition-backed version also tightened legislative oversight, requiring budgets approval from the legislature before funding is disbursed, Chen said.
The move reflected opposition concerns over fiscal burden, procurement efficiency and the scope of delegated authority, Chen added.
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