by Brian Hioe

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Photo Credit: Fu Kun-chi/Facebook

WITH THE BUDGET CUTS pushed for by the KMT, it has proven somewhat complicated to note what has actually been cut, and what government services are likely to be affected by the cuts.

As for the KMT itself, the KMT has downplayed the scale of the cuts, stating that this is only 3% of the proposed budget. The DPP has countered that the cuts affect 34% of the government’s operational budget, in that the government cannot change subsidies that go to local governments, or pay for salaries, which are among the expenses that comprise the 66% of funds that the government cannot change. Since then, however, the DPP has stated that subsidies from the central government to local governments may, in fact, be affected by the cuts.

Similarly, the KMT has alleged that such cuts are par for the course, pointing to reductions under the Tsai administration. Yet this is not the case. These are the largest cuts in Taiwanese history, larger even than those under the Chen Shui-bian administration.

Facebook post by the DPP emphasizing their claim of the budget cuts as 30% of available funding to the government

The Ministry of Foreign Affairs will have its budget slashed by half at a time when maintaining strong international relations is more important than ever. The Mainland Affairs Council (MAC) will have its budget cut by 30%, likely as political retribution–the KMT has historically campaigned on the basis of the claim that it is the only political party in Taiwan able to maintain stable cross-strait relations with China and in this way aims to undercut the functioning of the MAC to bolster that claim.

15% of the budget of the Ministry of Culture will be cut or frozen, as a means of lashing out against what the KMT claims to be DPP control of the cultural sector. Public broadcaster PTS will experience 23 million NT in cuts and 570 million NT frozen. This has been framed as an attack on Taiwan’s linguistic diversity, seeing as Taiwanese Hokkien programming and English-language Taiwan Plus will likely see cuts. Such cuts occur after the KMT moved to defund members of the Council of Indigenous Peoples last year. The Executive Yuan has stated that sign language services for its press conferences will end due to the cuts.

Taiwan’s oversight body, the Control Yuan, will have 90% of its budget cut. This includes the National Commission on Human Rights. Such cuts target the focus by the commission on memorializing Taiwan’s authoritarian past. The KMT, of course, is the former authoritarian party that ruled over Taiwan during this period.

As funding for museums and subsidies that artists frequently depend on will be frozen or cut, the creative class in Taiwan has been particularly incensed by the cuts. Such cuts also hurt Taiwan’s ability to advertise its brand internationally at a time of rising visibility. Educational institutions such as Academia Sinica will also face cuts.

100 billion NT in subsidies will be cut for Taiwan’s state-run power utility, Taipower. Such subsidies were what allowed Taipower to keep electricity prices low, as a result of which electricity prices will possibly rise. The KMT may hope that the public blames the DPP for the rise in electricity prices. But this proves dangerous for efforts by Taiwan to ensure that industry stays in Taiwan, rather than relocate elsewhere, seeing as Taiwan has a need to ensure that tech manufacturers stay and continue to be invested in Taiwan to shore up Taiwan’s importance to global supply chains–as this increases the incentive for other countries to defend Taiwan from the threat of a Chinese invasion.

The Ministry of National Defense will have funding for the domestic submarine program frozen by half, with KMT legislators claiming that this is because the program has not yet demonstrated results. Equipment and facilities funding will be cut by 3%.

Efforts to build up Taiwan’s drone capacity for asymmetric warfare will be impacted, with 30% of funding frozen for a large-scale drone training facility in Chiayi, where 50 companies working on drones are located, as well as other military industries clustered in the area. 30% of operation expenses will be frozen, impacting spare parts, ammunition, and fuel for military equipment. 15% in funding for domestic and international travel will be reduced, impacting Taiwan’s ability to conduct exchanges internationally for the sake of greater military cooperation. 60% of publicity funding will be cut, severely undercutting the ability of the military to advertise and recruit soldiers, as well as that this funding also goes to efforts at combating cognitive warfare. Despite that its role is more important than ever in countering grey-zone activity, the Coast Guard may not have enough to pay shipbuilders after the cuts, and the Ocean Affairs Council will face drastic reductions.

Facebook post with the KMT with their framing of the cuts as 3%

Any funds that go to civil defense organizations such as the Kuma Academy, too, are likely to be targeted. With the KMT leaning into attacks over the Kuma Academy’s funding, it has become increasingly common for the Kuma Academy to be accused of being a means of fraud and money laundering by the pan-Blue camp.

Cutting Taiwan’s defense budget has the potential to impact US-Taiwan relations, with the new presidential administration under Donald Trump calling on Taiwan to increase defense spending to 10% of GDP. The 2.5% of GDP that Taiwan spends on defense is already comparable to NATO countries and it would prove difficult to raise this to even 5%, seeing as 2.5% is already close to 1/3rd of government spending.

The Ministry of Digital Affairs (MODA) will have its funding cut by 40%. At a time in which Taiwan faces potential disruption to its telecommunications from Chinese vessels cutting submarine cables as a form of grey-zone activity, the relevant budget for repairing submarine cables will be cut by 56%. With government websites and databases experiencing 83,105 cyberattacks last month, funds for strengthening the digital resilience of government digital infrastructure will be cut from 170 million NT to 34 million NT.

MODA has pointed out that efforts to fight online scams have sometimes been outspent by scam efforts themselves, making such cuts inadvisable. Funding for cybersecurity monitoring and protection for Taiwan’s electricity grid, water, stock market, and telecommunications will be affected. Such cuts will also impact disaster relief, affecting satellite coordination fire departments, the military, and the police.

The MODA has also stated that basic online services, such as ordering train tickets online, may no longer be possible after the budget cut.

Ironically, at a time when Taiwan has touted its need to build up technology infrastructure for advances in AI, and the US recently announced 500 billion USD in AI infrastructure investment, this further means that Taiwan will not be able to keep pace with international trends.

Along similar lines, funding for the National Communications Commission will be cut by 50%, with 10% in funds frozen. This, too, will have an impact on how Taiwan is able to combat disinformation and misinformation in the media and online.

Funding for media and promotion for all government agencies and ministries will be cut by 60%. Though the KMT claims that this is in order to prevent the DPP from using such funds to politically propagandize, this is likely to affect the ability of the government to advertise services such as vaccinations, education about online fraud, and military recruitment.

As the KMT originally proposed reducing the budget for the Mainland Affairs Council, Ministry of Digital Affairs, and Ministry of Agriculture to 1 NT, the cuts have been scaled back from what they could have been. The KMT claims that such drastic cuts are necessary for Taiwan’s fiscal security.

Chart from The Reporter showing the scale of the cuts compared to in the past twenty-five years

Nevertheless, one notes that Taiwan already spends a relatively low percentage of its GDP on government expenses among OECD countries, leading to praise for its fiscal security in government expenditure. Strong economic growth in the past year has resulted in more tax revenue for the government to use, with record-high tax revenue in 2024.

Yet through such expansive cuts and by placing frozen funding conditional on the approval of the legislature, the KMT means to take ownership of government institutions. This continues the means by which the KMT seeks to use its current majority in the legislature to wrest powers from other branches of government, in that this is an attempt by the legislature to seize the powers to draw up and revise the budget from the legislature.

If basic government services are impacted by the cuts, the KMT will likely seek to pin blame on the DPP despite having called for the cuts to begin with. For its part, then, if such disruption occurs, the DPP will aim to frame the KMT as responsible. In this sense, a war of political narratives is ongoing between the two camps. To this extent, the KMT is likely to use the cuts to try and undermine strengthening relations between Taiwan and other countries as best as possible.

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