In a recent statement, Taiwan’s defense ministry has voiced concerns over the potential implications of a significant decrease in the country’s defense budget for 2025. Changes to the fiscal planning legislation have been approved, possibly leading to a 28% reduction in defense funding, equivalent to NT$80 billion (US$2.44 billion). This could critically impact the nation’s military development and readiness, the ministry warned.
The legislative changes were passed by Taiwan’s opposition parties, currently holding parliamentary majority. The amended Act Governing the Allocation of Government Revenues and Expenditures would result in a massive reduction of NT$375.3 billion (US$11.47 billion) from the central government’s total budget, if implemented.
At present, Taiwan’s defense budget sits at around 2.4% of its GDP. However, post-cut, this figure could drop to less than 2%, a concerning prospect in a region where neighboring countries are ramping up their defense expenditures, the ministry asserted.
The Taiwanese government previously suggested a record-breaking military budget for 2025, representing around 2.5% of the GDP. Unfortunately, this increase now seems improbable. The ministry expressed worry that this may portray a lack of will to defend ourselves to the international community.
The defense budget should be determined based on the perceived threats from adversaries and the necessity to bolster our military and war readiness, the ministry argued.
An analyst, Kuan-chen Lee, from the Institute for National Defense and Security Research, a governmental think tank, opined that Taiwan should not only enhance its defense budget but also strengthen its societal and economic resilience in the face of ongoing cross-Strait threats.
The ministry cautioned that the proposed budget reduction could hinder the continuous modernization of critical weapons and equipment. It also warned of potential challenges in making payments for contracted purchases.
This week, Taiwan invited bids to upgrade its C-130 military transport aircraft at an estimated cost of NT$126 million (US$3.85 million). This upgrade, part of a six-year overhaul project named Taiwu Mountain III, would enhance the aircraft’s integrated cockpits and sea rescue capabilities. The project is expected to cost NT$10 billion (US$ 305.86 million) and will run from 2025 to 2030.
