A bitter fight over transparency and purpose has erupted in Taipei after Taiwan’s defence ministerial team advanced a NT$1.25 trillion special defence budget, with government officials touting large economic and employment benefits and critics accusing the administration of mixing US arms purchases with domestic pork.
Defence minister Gu Lixiong said the special-budget legislation, if passed, would boost local defence production and generate about NT$400 billion in output while creating roughly 90,000 jobs. The claim was immediately challenged by former legislator Guo Zhengliang, who asked how a package he says is mainly intended for US arms purchases could be credited with generating so many domestic jobs.
Guo has demanded clarity on the budget’s composition and accused the administration of “mixing” island projects with foreign procurement to sweeten the pitch to lawmakers. He argued that genuinely domestic defence-industrial investment should be debated within the ordinary defence budget and that the special-budget route raises suspicion about what is being hidden from public and legislative scrutiny.
The dispute has been fuelled by wider partisan and international pressure. The American Institute in Taiwan’s Taipei director, Gu Liyan, and several US politicians publicly urged Taipei to pass the bill, accusing local opposition of standing in the way of Taiwan’s urgent defence needs. The Kuomintang’s vice chair Xiao Xucen echoed criticisms of the Democratic Progressive Party (DPP), accusing the administration of using the spectre of stronger defence to flatter Washington while leaving unresolved questions about corruption and procurement value.
Opposition figures such as Huang Kuo-chang have amplified that line, arguing that the actual value of weapons the US intends to sell directly to Taipei is far smaller than the grand total in the proposed special budget, and calling the discrepancy evidence of potential graft. Beijing has seized on the controversy, with the mainland’s Taiwan Affairs Office warning against “external interference” and accusing the DPP of squandering public funds and turning Taiwan into a pawn of foreign forces.
Why this matters: the dispute sits at the intersection of Taiwan’s urgent need to modernise its defences, the island’s dependence on US arms sales, and fragile domestic trust in procurement processes. Large, fast-tracked defence budgets are politically sensitive everywhere; in Taiwan they invite scrutiny both because of past procurement scandals and because accelerated purchases from foreign suppliers often produce limited domestic industrial benefits.
The job and output numbers cited by Taipei’s defence leadership deserve scrutiny. Aggregate employment figures for large procurement programmes typically rely on assumptions about domestic industrial content and multipliers that are opaque. If a majority of the NT$1.25 trillion is earmarked for direct Foreign Military Sales or imports from US suppliers, the share of spending that translates into island jobs and value-added will be modest compared with headline totals.
The coming weeks will test whether Taipei can both reassure Washington and satisfy its own legislature and voters. Key markers to watch include a line-by-line public breakdown of the special budget, any offset or industrial-participation commitments from foreign suppliers, and whether the bill is routed through ordinary budgetary oversight or kept as an expedited special measure. How Taipei navigates transparency and oversight will shape not only its defence-industrial base but also public trust and cross‑strait political dynamics.