Taiwan's opposition-led legislature approved a $93bn annual budget after a record 266-day delay, keeping funding for a key drone development programme central to the island's defence strategy. The Kuomintang withdrew a threatened 70% cut to drone funding after finding no overlap between procurement and development plans. Lawmakers also imposed cuts to agency allowances, military equipment spending and media budgets while the government had been operating under a provisional budget. Leaders from both camps urged greater compromise to ease political and social tensions.
Taiwan Parliament Ends Record 266-Day Deadlock, Approves $93bn Budget and Keeps Drone Programme
Taiwan's military deploys a Sky Sword 1 surface-to-air missile system during a drill as part of the annual Han Kuang military exercises in Hsinchu, Taiwan, on August 7, 2026 [Ritchie B Tongo/EPA]
Taiwan's opposition-controlled legislature late on Friday approved a $93bn annual budget, ending a record 266-day political deadlock that extended beyond the legal deadline. The bill preserves funding for a domestically led drone development programme that Taiwan regards as a core element of its defence posture against rising pressure from Beijing.
President William Lai Ching-te's administration, which lost its parliamentary majority in 2024, had repeatedly clashed with opposition parties over spending. Lawmakers ultimately accepted the government's plan while imposing a series of cuts and adjustments across departments.
Drone Funding Intact: The budget retains allocations specifically earmarked for drone development despite an earlier Kuomintang proposal to cut those funds by 70 percent. The Kuomintang withdrew the proposed reduction after concluding there was no wasteful overlap between development and procurement programmes — the basis it had cited for the initial threat.
Major Cuts and Adjustments:
- 60% reduction to special allowances for government agency heads.
- 2.5% cut to spending on military equipment and facilities.
- 50% reduction in media policy and publicity budgets.
Before the final vote, the government operated under a provisional budget to ensure civil servants were paid and welfare programmes continued to run. The drawn-out process prompted calls for greater compromise from both sides.
Legislative Speaker Han Kuo-yu said the delay caused 'social division and a constitutional impasse' and urged lawmakers to seek common ground. President Lai described parliamentary oversight as 'an important constitutional duty.'
In a related move in May, the same opposition-controlled legislature cut a proposed $40bn special defence appropriation by 38%, removing funding for domestically produced combat drones while leaving purchases of US-made arms intact.
Taiwan's military currently fields fewer than 5,000 drones. By contrast, China is reported to have ordered close to a million drones for delivery this year — part of a broader regional buildup that observers say includes ambitious drone targets elsewhere, including Ukraine's reported plans. Beijing continues to claim self-ruled Taiwan as its territory and has sharply escalated military pressure on the island in recent years.
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