Taiwan's Cabinet Warns of Security Risks Amid Budget Cuts

TAIPEI (Reuters) – Taiwan's cabinet warned on Monday that the island's security might be at risk after opposition parties passed laws requiring cuts in government spending, including defense, during a time of increased military activity from China.

Opposition Legislation

Taiwan's opposition parties, holding a parliamentary majority, passed legislation last week that shifts spending from the central government to local municipalities. This move is strongly contested by the ruling Democratic Progressive Party (DPP) and has led to protests.

Financial Implications

Finance Minister Chuang Tsui-yun stated at a media briefing that the legislation will "seriously weaken the central government's financing," possibly necessitating increased debt financing. To meet new funding requirements, the central government will need to cut 28% from its budget proposal, which included T$294.5 billion allocated for defense.

Defense Risks

Taiwan President Lai Ching-te expressed concerns over the potential for the legislation to crowd out the defense budget, stating that Taiwan's combat capacity could be deeply affected. He emphasized that national security and the safety of the 23 million Taiwanese citizens are at stake.

Rising Military Pressure

In August, the cabinet proposed a 7.7% year-on-year increase in defense spending, bringing it to T$647 billion, as Taiwan enhances its military capabilities in response to growing threats from Beijing, which views Taiwan as part of its territory.

Government Response

Cabinet spokesperson Michelle Lee indicated that the government will utilize "every possible administrative remedy" permitted by the constitution to preserve the defense budget. She mentioned the possibility of revising the budget proposal, which awaits parliamentary approval. The DPP, having lost its parliamentary majority in January, is in a stand-off with the opposition on various issues.

> Note: $1 equals 32.6710 Taiwan dollars.