Taiwan: Budget Deadlock and Political Confrontation

Since last autumn, tensions between Taiwan’s executive and legislative branches have once again intensified. The dispute should be attributed to the fundamental disagreement over the 2026 budget, since both parties’ approaches to forming it diverge drastically.

Origins of the Conflict

Attempts by the DPP to redress this imbalance, making use of prosecutorial investigations and recall campaigns against opposition lawmakers, have failed. In these circumstances, the processes of drafting and approving of the key document, the 2026 budget, have become the central battleground in Taiwan’s political standoff.

Competing Priorities: DPP and KMT on the 2026 budget

The Democratic Progressive Party prioritises defence and security when it comes to public spending. It comes as no surprise, given Beijing’s uncompromising stance on Taiwan aspiring for international recognition. Official Taipei openly rejects the “One China” principle, while mainland China maintains legislation providing for a “non-peaceful solution” to the Taiwan issue.

Recurring references to this law by the Chinese leadership and conspicuous military exercises by the People’s Liberation Army of China (PLA) in the vicinity of the island pave the way for Taiwan to strengthen its defence sector. The guiding principle of this Taiwan strategy is the “porcupine” concept, which nobody wishes to “eat” – an idea formulated back in 2020 by United States National Security Adviser Robert O’Brien.

Despite statements about defence spending having a positive impact on the economy, such expenditure invariably diverts resources from other vital areas. The share of defence spending in Taiwan’s budget is steadily increasing, and in the 2026 draft, it is planned to reach the level of 3.3 per cent. President........

© New Eastern Outlook