Taipei: Taiwan's 2025 central government budget cleared the legislative floor with cuts of nearly 7 percent on Tuesday, after months of political wrangling between ruling party and opposition lawmakers. The Legislature approved the budget of NT$2.92 trillion (US$89.15 billion) for fiscal year 2025 after slashing and freezing an unprecedented NT$207.5 billion from the original Cabinet-proposed plan.
According to Focus Taiwan, at a news conference earlier the same day, Premier Cho Jung-tai criticized the opposition Kuomintang (KMT) and Taiwan People's Party (TPP) for making proposals to cut the budgets of various agencies. The premier accused the opposition parties, which hold a majority in the Legislature, of trying to disrupt the operations of the government, which is led by the Democratic Progressive Party (DPP), by significantly reducing budgets.
The Cabinet submitted its NT$3.13 trillion budget plan to the Legislature for approval in August 2024, but ruling party and opposition lawmakers did not begin formally discussing it until two months later due to disagreement between the two sides. The cuts of NT$207.5 billion passed on Tuesday include reductions of NT$93.98 billion that were adopted on Jan. 17, when the Legislature began voting on a raft of budget downsizing proposals driven by the KMT and TPP.
They also include the Legislature's freezing of half of the planned NT$2 billion funding for Taiwan's fleet of indigenous defense submarines (IDS) on Monday. The freeze means Taiwan's Navy will not be able to spend the NT$1 billion until the IDS prototype, the Narwhal, completes its sea acceptance tests (SAT) and the Ministry of National Defense (MND) briefs lawmakers about it.
The cuts of NT$207.5 billion also include a reduction of NT$100 billion in funding for state-owned Taiwan Power Co. (Taipower), which has sustained huge losses due to rising global oil prices and the government's reluctance to raise utility prices. At Tuesday's news conference, Cho suggested the move could have an impact since the funds subsidize energy costs for consumers, though he added the government was unwilling to pass on electricity costs to consumers at this time.
After the budget plan cleared the Legislature, KMT legislative caucus whip Fu Kun-chi defended the cuts to Taipower's budget by saying that the DPP government's energy policy had undermined the public interest. He criticized the government's proposal to increase spending by 10 percent in 2025 compared to 2024, since the country's GDP was projected to grow by only about 3 percent this year. It is the Legislature's duty to oppose budget plans put forth by the government, Fu added.
Vice Premier Cheng Li-chiun said on Monday that the opposition-endorsed budget cuts would be unprecedented, noting that the average budget cuts over the past three years were 1.17 percent, and between 1.1 and 1.3 percent over the past 10 years. In a social media post on Tuesday evening, President Lai Ching-te criticized the budget cuts, which he said would affect the fundamental functioning of the nation. Lai added that he would ask the Cabinet to identify public services that might be disrupted due to the cuts and report to the public as soon as possible.