(Central News Agency reporter Hou Ziying, Washington, 21st) The Executive Yuan will pass the central government’s general budget for 2016. The overall size of the defense budget has exceeded 1 trillion for the first time, exceeding 3% of GDP. American scholars analyzed that this budget shows that the Lai government is committed to meeting Trump's expectations for partners to increase military spending, sending the right signal. It also shows to Beijing that provocative actions have not made the Lai government back down on its national security commitments.
The Executive Yuan will pass the "116 Central Government General Budget and Affiliated Unit Budget and Comprehensive Table" on the 20th, Taipei time, and will be sent to the Legislative Yuan for review before the end of August. The overall size of the defense budget will reach NT$1.1225 billion.
Michael Hunzeker, an associate professor at George Mason University in the United States who pays attention to Taiwan's defense issues, responded to the Central News Agency reporter's question by email, saying that in a symbolic sense, this budget is a very positive development and clearly shows that Taiwan President Lai Ching-te is committed to maintaining defense spending above 3% of gross domestic product (GDP) and moving towards the goal of reaching 5% of GDP in 2030.
In view of the White House's emphasis on asking allies and partners to increase military budgets, Honzek believes that this is a signal that should resonate with the White House. At the same time, it should also send a clear signal to Beijing that its increasingly provocative actions have not caused the Lai government to back down from its national security commitments.
On a practical level, he pointed out that the continued increase in the defense budget should provide the national army with additional resources to purchase better weapons, ammunition, and parts; expand rigorous and combat-oriented training opportunities for various units; enhance resilience building; and find ways to attract and retain personnel in key front-line combat units.
However, Honzek also said that "this proposal is just the beginning of a long process, and potential obstacles and challenges still exist," including review by the Legislative Yuan. Considering that the Legislative Yuan, which has a majority of seats held by the opposition party, did not pass the 2026 budget until last week, coupled with the opposition party legislators’ previous resistance to the Lai government’s eight-year defense special budget, it is expected that this new budget will also receive the same degree of strict scrutiny, especially as the political parties are preparing for the upcoming local elections in November.
On the other hand, Honzek analyzed that although this budget shows that the Lai administration is committed to meeting U.S. President Donald Trump’s expectations for allies and partners, the Trump administration’s Taiwan policy may still be subordinated to its China policy. The White House may also be busy dealing with a series of other pressing national security challenges and alliance relations, such as the Iran war, the United States' lack of aircraft carrier deployment in the Pacific, ammunition shortages, North Korea issues, etc.
In other words, Honzek said, "This budget shows that Taiwan is sending the right signal," but he is not sure whether the most critical decision-makers in the White House will take notice.
A spokesperson for the U.S. State Department responded to a reporter's question in a background manner today, saying that the United States welcomes Taiwan's budget proposal to increase defense spending to more than 3% of GDP, which "demonstrates Taiwan's determination to strengthen its self-defense capabilities."
The spokesperson also said that the United States supports Taiwan in acquiring key defense capabilities commensurate with the threats it faces. "The fact is that the threats Taiwan faces from China have increased significantly."
According to the central government's general budget for 2016 approved by the Executive Yuan, in terms of national defense funding, the Ministry of National Defense has allocated a total of NT$691.9 billion. Including the NT$218.2 billion in special budgets that have been allocated and expected to be allocated, and the non-operating special funds of NT$60.7 billion. In addition, taking into account the standards of the North Atlantic Treaty Organization, including retirement benefits for retired officers and soldiers and expenditures by the Coast Guard, the overall defense budget reaches NT$1.1225 trillion.
Regarding the ratio of national defense expenditures to GDP, Xie Qixian, Chief Accountant of the Ministry of National Defense, pointed out that if we take 2015 as the basis, next year’s defense budget will reach 3.93% of GDP. However, if we use the estimated GDP of 37.3 trillion yuan in 2016 released by the General Accounting Office in August this year, the national defense proportion will be 3.01%.
Xie Qixian said that last year, the defense budget accounted for more than 3% of GDP for the first time. President Lai also announced that the future defense budget should reach at least 3% of GDP every year and reach the GDP target of 5% by 2030.
