The Ministry of National Defense (MND) on Wednesday defended its operational maintenance spending for next year in response to concerns that an “arms procurement bubble” could make the nation’s defense capabilities less potent than its defense spending would otherwise suggest.
Association of Strategic Foresight research fellow Chieh Chung (揭仲) said in an interview with local Chinese-language news outlet Storm Media on Thursday last week said that Taiwan’s armed forces might face an “arms procurement bubble.”
Ideally, the ratio of arms procurement costs to operational costs should be about 1-1, Chieh said.
Photo: Chen Yu-fu, Taipei Times
However, with only NT$148.7 billion (US$4.66 billion) earmarked for operational maintenance next year, that ratio for Taiwan’s military would be 1.59 to 1, which creates an imbalance, he said, warning about the dangers if this disparity widens.
Asked about the ratio, Major General Hsin Yi-tsung (辛宜聰) from the ministry’s Comptroller Bureau told a news conference that the operational maintenance spending earmarked for fiscal year 2025 has increased nearly 70 percent since 2018.
The perceived high spending proposed in the budget for next year is due to the need to purchase spare parts for newly approved arms procurement packages, Hsin added.
When the warranty for weapons nears their expiration date, the ministry would then budget the operational maintenance costs, he said, adding that the ministry is expediting work to phase out outmoded equipment to cut spending.
The ministry would continue reviewing and adjusting the allocation of funds to maximize the efficacy of weapons systems, he added.
A defense spending plan unveiled by the Cabinet on Thursday last week showed that the government has allocated NT$236.2 billion for weapons procurement and development, including NT$145.8 billion for military investment and NT$90.4 billion in two special budgets for purchasing F-16V jets, missile systems and uncrewed aerial vehicles.
Despite the two special budgets combined being lower than the NT$94.3 billion budget proposed for the current fiscal year, Chieh warned that if all NT$90.4 billion earmarked for next year is sourced through borrowing, the government would borrow as much as 38 percent of funding for the special budgets.
While Hsin did not disclose how much of the special budgets would be funded by borrowing, he said that the spending plan was drafted in accordance with the Public Debt Act (公共債務法) and other relevant laws.
The special budgets are funded by unused portions of the general budget rolled over from the previous fiscal year or by borrowing according to the spending plans for the special budgets delivered to the legislature by the Cabinet.
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