Control Yuan Building in Taipei. Photo by: Olimpia Kot
What is happening?
On January 22, after nearly 20 hours of continuous voting, the Legislative Yuan approved the government budget, which included a historic reduction of approximately 207.5 billion TWD (6.3 billion USD) for government agencies. This marks the largest budget cut in Taiwan’s history, reducing total expenditures from the initially proposed NT$3 trillion to approximately NT$2.9248 trillion – approximately 6 percent. Meanwhile, government revenues reached NT$3.1534 trillion, surpassing the NT$3 trillion mark for the first time.
While the Chinese Nationalist Party (Kuomintang; KMT) and the Taiwan People’s Party (TPP) defended the reductions, asserting that they aimed to curb wasteful spending, Premier Cho Jung-tai (卓榮泰) criticized the opposition, accusing them of “indiscriminately cutting budget items” to disrupt the Executive Yuan’s operations. Culture Minister Li Yuan (李遠) also expressed his frustration, describing the budget cuts as both unreasonable and humiliating.
What is the broader picture?
Special expenses for the Executive Yuan, Mainland Affairs Council, Council of Indigenous Peoples, and several ministries were eliminated, and media policy expenses were cut by 60 percent. Controversial measures included a 70 percent freeze on the Executive Yuan’s operating expenses, a 50 percent freeze on the Ministry of National Defense’s indigenous submarine program budget, and a 50 percent freeze on the Ministry of Foreign Affairs’ expenses. The Ministry of Transportation warned that the cuts would hinder the Central Weather Administration’s forecasts and public transportation operations.
The largest budget cuts in the past two decades occurred during the Democratic Progressive Party’s Chen Shui-bian (陳水扁) administration in 2006, with a reduction of 2.27%. However, this year’s (2025) cuts have reached 6.63%, far surpassing that record and setting a new high.
While the opposition defended the reductions, saying they were seeking to stop wasteful spending, Premier Cho Jung-tai (卓榮泰) questioned, “Which agency can smoothly execute its operations at the beginning of the year with 70% of its budget frozen?”
Thirty-three civil society organizations, including the Chen Wen-cheng Foundation, the Nylon Cheng Liberty Foundation, and the Taiwan Association for Human Rights, issued a joint statement condemning the KMT and TPP. They accused the parties of “destroying democracy through democracy” by freezing and cutting budgets for transitional justice-related entities, such as the Ill-gotten Party Assets Settlement Committee, the Ministry of Culture, the National Human Rights Museum, and the Youth Development Administration. These actions, they argued, hinder the return of illicit party assets to the public and undermine efforts to promote transitional justice, threatening the foundation of Taiwan’s democracy. They argued that the rushed nature of the budget review process led to chaotic proceedings in the Legislative Yuan. Transparency advocates criticized the lack of real-time, public access to budget information.
At a Taipei news conference, Cho announced that the Cabinet would seek “remedies” to overturn the budget plan.
However, as the finalized plan has yet to be submitted to the Executive Yuan, any action will likely be delayed until after the Lunar New Year holiday from Jan. 27 to Feb. 2.
Why does it matter?
This year’s budget cuts have marked a significant and contentious development in Taiwan’s fiscal history. While proponents argue that the reductions are necessary measures for fiscal oversight to address inefficiencies and curb wasteful spending, others perceive them as a politically motivated effort to undermine the government’s functionality. Detractors caution that such substantial reductions may adversely affect Taiwan’s administrative efficiency, diminish public confidence in governance, and threaten the country’s reputation for stability and democratic resilience in the international arena.