Defense Budget Sees Sharp Increase, Plagued by Inflated and Padded Allocations
By Lu Shao-lung, China Times Opinion, October 13, 2025
Taiwan’s defense spending for next year is set to rise sharply. During a recent joint committee review of the “Special Budget for Strengthening Economic, Social, and National Security Resilience in Response to International Developments,” opposition lawmakers questioned several questionable allocations within the Joint Operations Center’s budget — including the purchase of chairs priced at NT$50,000 (about US$1,650) each for senior officers. The war-gaming room’s upgrade budget totals NT$30.45 million (about US$990,000), of which NT$2.5 million (about US$81,000) is earmarked solely for tables and chairs. In addition, the Ministry of National Defense (MND) planned to spend nearly NT$800 million (about US$26 million) to stockpile bottled water for wartime reserves, buying 500-milliliter custom-made bottles at NT$120 (about US$3.90) each—more than 10 times the current procurement price. The ministry later announced it would scrap the NT$50,000 chair purchase.
Although the Armed Forces argued that these procurements were necessary to enhance “operational resilience,” the case illustrates classic budget inflation. With an influx of new funds, departments appeared intent on exhausting every available allocation — filling the ledger even with luxury chairs—just to meet the total special budget target.
First, the war-gaming room upgrade’s eligibility under the “resilience” special budget is highly questionable. Such spending should fall under the regular defense budget as part of operational maintenance costs, not as a special expenditure.
Second, whether the NT$50,000 chair was intended for a specific officer or multiple ones, how did this item pass review without scrutiny? Was no one aware of, or willing to question, why a single chair would cost so much? Or was the review process so rushed that officials simply filled up the special budget quota granted to the MND without detailed examination? If this were part of the regular operations budget, would anyone have dared submit it?
More importantly, President Lai’s administration has pledged to raise defense spending to 5 percent of gross domestic product (GDP) by 2030—more than double this year’s defense budget—alongside over NT$1 trillion in new special arms procurement. To U.S. defense contractors, this likely signals a windfall opportunity. Prices could easily include “hidden” costs—such as NT$100,000 (about US$3,300) chairs or NT$5 million (about US$163,000) tables—that might escape the military’s notice. And even if discovered, would Taiwan dare demand a refund from the United States?
Of course, “chairs and tables” are merely examples. American contractors are far too sophisticated to make such blatant mistakes. Any real padding would appear in spare parts, technical fees, or maintenance costs—all under plausible, legitimate-sounding categories—not something as obvious as a “US$250,000 submarine toilet.”
Indeed, a precedent already exists. Last year, a U.S. arms supplier overcharged Taiwan in a Patriot missile deal. The issue was discovered not by Taiwan’s defense authorities, but by the United States. The overcharged amount was later reimbursed to Taiwan’s account and returned to the national treasury.
In October last year, the U.S. Department of Justice announced that American defense giant Raytheon was under investigation for multiple cases of fraud and bribery in foreign military contracts — including those involving Patriot missiles and radar systems—in which the company overbilled the Department of Defense and reaped excess profits. Raytheon admitted to fabricating costs during contract negotiations, overcharging for expenses, and even billing the Pentagon twice for the same radar personnel contract.
The overbilling was caught by the U.S. government—not by the MND. Although Raytheon reimbursed the excess funds, Taiwan dared not label it an unwelcome supplier. As Taiwan’s defense spending continues to soar, similar cases of inflated budgeting—whether NT$50,000 chairs or worse — are likely to grow, not diminish.
From: https://www.chinatimes.com/opinion/20251013003475-262104?chdtv