Taiwan 2026 budget passes after record delay

Taiwan’s lawmakers approved the government’s 2026 budget on Friday after the longest delay on record, clearing this year’s spending plan shortly before parliament is expected to receive the 2027 proposal.

President Lai Ching-te’s government and his Democratic Progressive Party have been at odds with opposition parties, which hold the most seats in parliament, over general spending, including defence.

The government said last August that total expenditure for 2026 was budgeted at just over NT$3 trillion, around $94 billion, up NT$110 billion or about 3.8 percent from 2025. Opposition lawmakers agreed on Friday to cut the budget by NT$48 billion, or around 1.6 percent, nearly eight months after it was supposed to be approved.

Fu Kun-chi, caucus leader for the main opposition Kuomintang, said the number of proposed amendments was reduced from more than 1,700 to a final 40 to 50, saying that showed parliament’s “utmost goodwill”.

Lai later said in a social media post that the budget included “numerous unreasonable cuts and freezes”. He said that, in addition to the NT$48 billion cut, funding for policy promotion had been significantly reduced and funding had been frozen for normal government operations and the salary of the head of the executive branch, referring to the premier.

Taiwan’s government plans to announce its 2027 expenditure plan on August 20, and parliament is likely to receive it for review by the end of August.

Annual budget approval delays in Taiwan do not cause a government shutdown because the previous year’s expenditure plan is automatically applied for the current year, allowing existing programmes to continue.

Opposition lawmakers blamed Lai’s government for the delay, saying it had not earmarked funding for military pay rises and higher pensions for police officers and firefighters.

Much of the dispute has centred on defence spending. Lai has vowed to raise defence spending to more than 3 percent of GDP this year and 5 percent by 2030. His plan to allocate $40 billion in special funds for US weapons purchases and domestic drone procurement over several years was thwarted by the KMT and the Taiwan People’s Party, which instead passed a $25 billion budget in May.

Parliament is now considering rival proposals for billions of dollars in drone investment.