Proposed defence budget of NT$117.6 billion by the Cabinet

The Taiwanese government has proposed special defense budgets amounting to NT$117.6 billion (US$3.85 billion), a significant boost to military spending beyond the limits of the general budget. This move comes as the Ministry of National Defense seeks approval for a special budget of NT$7.6 billion.

The proposed budget, if approved, could fund the production of indigenous defense submarines, drones, and uncrewed surface vehicles, as well as the purchase of significant platforms such as M1A2T main battle tanks and High Mobility Artillery Rocket Systems. The sale of these platforms to Taiwan was previously approved during former U.S. President Donald Trump's first term.

The anticipation for these special budgets arises from the expected additional arms sales approvals from the Trump administration. Moreover, the term "Davidson window," which originated from then-US Indo-Pacific Command commander Philip Davidson's 2021 testimony to the US Congress, suggests a high probability that the U.S. could sell advanced weapons to Taiwan next year. The "Davidson window" refers to the 2027 timeline when Chinese President Xi Jinping allegedly instructed the Chinese People's Liberation Army to be ready to invade Taiwan.

National Taiwan University Department of Political Science associate professor Chen Shih-min has also mentioned the potential acquisition of M1A2T main battle tanks and High Mobility Artillery Rocket Systems.

The special budgets could also fund the procurement of drones from the U.S. and local manufacturers, as well as the development of domestically made uncrewed surface vehicles. The government is confident that additional arms packages would be forthcoming from the U.S. and is preparing for them through special defense budgets.

The special budget would bring spending on defense to NT$949.5 billion, equivalent to 3.32 percent of GDP. The remainder of the funds is to be earmarked under the Homeland Security Resilience Special Budget and the Foreign Military Sales Special Budget.

Su Tzu-yun, a research fellow at the government-run Institute for National Defense and Security Research, stated that the Ministry of National Defense's general budget increase is limited. She emphasised that the use of special budgets is a natural way to meet arms procurement needs.

Directorate-General of Budget, Accounting and Statistics official Hsu Yung-yi provided these details, but did not provide further details as the budgets remain under Cabinet review. The special budgets could potentially fund the purchase of E-2D airborne early warning aircraft and M109A7 self-propelled howitzers from the U.S.

The proposed special defense budgets aim to prioritise domestically produced weapons to stimulate the defense industry and broader economic growth. This approach aligns with the hopes of Su Tzu-yun, who believes that the special defense budgets should focus on locally produced weapons.