NEW TAIPEI CITY, Taiwan \u2013 Taiwan\u2019s government may be facing a fight to find the funding to pay for planned military spending, including announced arms purchases from the United States.<\/p>\n\n\n\n
Taipei said last month it would buy a large $11.1 billion arms package from the United States including HIMARS rocket systems. A month earlier Taiwanese President William Lai announced a roughly NT$1.25 trillion ($39.5 billion) special defense budget to start now and last through 2033 on top of routine annual military expenditures.<\/p>\n\n\n\n
Taiwan\u2019s government, though, may need to fight to find funding because of the sheer size of the expense and bottlenecks in the legislature, the opposition-controlled Legislative Yuan.<\/p>\n\n\n\n
Opposition parties blocked a special defense budget during a Jan. 9 session, calling it inconsistent with the law, with some opponents preferring raising only military pay and pensions via special appropriations.<\/p>\n\n\n\n
\u201cThe money is technically raiseable because Taiwan has the fiscal capacity, but the real constraints are political patience and interparty bargaining,\u201d said Hu Jin-li, a professor with the Institute of Business and Management at National Yang Ming Chiao Tung University in Taipei.<\/p>\n\n\n\n
Taiwanese Premier Cho Jung-tai said in a Jan. 8 statement that an earlier legislative blockade of the special budget had affected the release of NT$75.2 billion ($2.38 billion) earmarked for deterrence and asymmetric warfare capabilities, among other items. The full special budget is also designed to cover precision fires, long-range strike and missile defense.<\/p>\n\n\n\n
On Jan. 15, Deputy Defense Minister Hsu Szu-chien \u2013 responding to one lawmaker\u2019s concern \u2013 said the special budget sum reserved for buying U.S. arms would equal about NT$900 billion, with NT$300 billion for domestic military spending.<\/p>\n\n\n\n
Few countries apart from the U.S. sell arms to Taiwan for fear of a backlash from China, which protests almost every sale of weaponry announced by Washington. China\u2019s military budget was set at $246 billion last year compared to Taiwan\u2019s $31.2 billion.<\/p>\n\n\n\n
About 54% of Taiwanese citizens take a dim view of lawmakers slow-walking the special defense fund, while 30.2% view the process more positively, according to a Dec. 22 poll by the Taiwan Public Opinion Foundation.<\/p>\n\n\n\n
Without approval of the special budget, analysts said, Taiwan\u2019s government must shift money from other departments at the risk of upsetting their beneficiaries or sell bonds to raise money.<\/p>\n\n\n\n
Taiwan has previously paid for weapons, from at home and abroad, by supplementing its regular defense spending.<\/p>\n\n\n\n
\u201cIf the [Taiwanese] legislature does not approve a defense budget increase, the government can shift already-approved defense funds from one priority to another, but this obviously creates tradeoffs that can quickly become unsustainable,\u201d said Denny Roy, a senior fellow at the East-West Center think tank in Hawaii.<\/p>\n\n\n\n
Lai\u2019s government may eventually reallocate funds from education or social welfare, said Chen Yi-fan, assistant professor in the Diplomacy and International Relations Department at Taiwan\u2019s Tamkang University.<\/p>\n\n\n\n
\u201cBig, visible cuts to social programs are politically toxic, especially with demographic pressures and cost of living concerns,\u201d Hu said. \u201cTherefore, soft budget reallocation \u2013 slower growth, delayed projects, tighter capital spending \u2013 should be more likely rather than headlines like \u2018We cut X to fund weapons.\u2019\u201d<\/p>\n\n\n\n
Meanwhile. borrowing is the \u201cmost probable way\u201d in funding more defense, Chen said. \u201cTaiwan has good financial discipline, so there\u2019s room for the government\u2019s borrowing.\u201d<\/p>\n\n\n\n
Fitch Ratings said in August that Taiwan had a \u201csubstantial net external creditor position, [a] record of prudent fiscal management and a favorable business environment,\u201d earning the island an AA rating with a \u201cstable\u201d outlook. Taiwan also ran a tax surplus in 2024.<\/p>\n","protected":false},"excerpt":{"rendered":"
Without approval of a special budget, analysts said, Taiwan\u2019s government must shift money from other departments at the risk of upsetting constituents.<\/p>\n","protected":false},"author":7,"featured_media":120197,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":45,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[45,160,11,36],"tags":[],"coauthors":[463],"class_list":["post-71675","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia-pacific","category-daily-news-roundup","category-global","category-newsletters"],"acf":{"subheadline":"","legacy_arc_id":"W3HSEOKLORCBHNHEV6S62DRA2M","arc_canonical_url":"\/global\/asia-pacific\/2026\/01\/23\/taiwan-leaders-face-pushback-on-massive-defense-budget-mechanics\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"\n