TAIPEI, Taiwan – Taiwan’s opposition parties, which control the legislature, have forced through a 6.6% cut in the 2025 budget, which the ruling Democratic Progressive Party, or DPP, described as a “hostile” attempt that poses an “unprecedented” security risk.
The island’s Legislative Yuan approved the 2025 central government general budget on Tuesday, which saw a record cut of approximately $207.5 billion New Taiwan dollars (US$6.34 billion) forced by the opposition Kuomintang and Taiwan People’s Party.
The affected items include Taiwan’s defense and diplomatic budgets, with half of the proposed NT$2 billion (US$66.67 million) funding for an indigenous defense submarine, or IDS, program being frozen on Monday.
The freeze prevents Taiwan’s navy from accessing the NT$1 billion until the IDS prototype, the Narwhal, completes its sea acceptance tests and the Ministry of National Defense briefs lawmakers.
The IDS program, which produces the island’s first self-made submarine, the ROCN Hai Kun submarine, also known as SS-711, is intended to develop the capacity to intercept Chinese People’s Liberation Army Navy fleets from entering the Pacific Ocean, preventing the encirclement or blockade of waters around Taiwan or breaking through blockades.
The submarine is undergoing testing.
“This is a budget review that hurts our allies and pleases our adversaries. The nation’s interests are being undermined, our competing nations are catching up, and hostile China will be very satisfied,” said Executive Yuan Premier Cho Jung-tai, who is a member of the DPP.
A Kuomintang legislator, Hsu Chiao-Hsin, insists that the remaining budget will only be released after the first submarine passes its sea test but Deputy Defense Minister Po Hung-hui said that would negatively affect the program.
“The decision has greatly discouraged colleagues who have worked tirelessly on the submarine program for years,” Po told a press conference on Tuesday.
Some analysts, on the other hand, say overseeing the budget is “justified” on some conditions.
“The submarine is still a prototype with significant room for improvement. The concern now is that it has yet to undergo sea trials,” Shu Hsiao-Huang, an associate research fellow at the Institute for National Defense and Security Research, told Radio Free Asia.
“If the trials reveal numerous issues that require adjustments or system updates, there are doubts about whether this design can be applied to the second and subsequent mass-production vessels. And there are uncertainties about potential changes in shipbuilding costs.”
He added that although it was reasonable for legislators to oversee budget outlays, the ruling and opposition parties should not treat it as a tool for political purposes.
“Hopefully, this will not devolve into political infighting, which could lead to flawed policies and turn into a political battleground,” Shu said.
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Cooperation with US
Taiwan is expected to conclude a major arms purchase agreement with the new U.S. administration of President Donald Trump, with media reporting in November that Taiwan had already approached Trump’s team regarding a possible US$15 billion weapons package.
Nevertheless, Shu said that issues such as delayed deliveries of U.S. arms also complicated Taiwan’s use of its defense budget.
The Washington-based Cato Institute said in a September report that as of August 2024, the total value of undelivered U.S. arms to Taiwan had reached US$20.53 billion.
“Taiwan’s overall military procurement contract with the U.S. is fine,” Shu said. “The only issue that could disrupt the budget use is the delayed weapons,” he said, adding that inflation also complicated the process.
“The procurement details such as personnel training, follow-up equipment support, additional ammunition and spare parts can also lead to any adjustment of the budget,” he added.
Edited by Taejun Kang.