DEFENSE/MND defends maintenance spending over 'arms procurement bubble' concern

Taipei, Aug. 28 (CNA) Taiwan's defense ministry on Wednesday defended its operational maintenance spending for next year, in response to concerns raised by an expert that an "arms procurement bubble" could make the country's defense capabilities "far less potent" than its defense spending would otherwise suggest.

Chieh Chung (揭仲), a research fellow at the Association of Strategic Foresight, said in an interview with Chinese-language Storm Media on Aug. 22 that Taiwan's armed forces could be looking at an "arms procurement bubble."

In an ideal situation, the arms procurement cost-to-operational maintenance cost ratio of any military should be approximately 1-to-1, Chieh noted.

However, with only NT$148.7 billion (US$4.65 billion) earmarked for operational maintenance over the next year, that ratio for Taiwan military is now 1.59-to-1, which creates an imbalance, he argued, warning about the dangers if this disparity widens.

In response, Major General Hsin Yi-tsung (辛宜聰) from the Ministry of National Defense's (MND) Comptroller Bureau said at an MND news conference that the operational maintenance spending earmarked for Fiscal Year 2025 has increased nearly 70% since 2018.

The perceived high spending proposal under the budgets for FY2025 is due to the need to purchase spare parts for newly approved arms procurement packages, Hsin added.

When the warranty of weapons nears its expiration date, the MND will then budget operational maintenance costs, he explained.

At the same time, the MND is expediting work to phase out outmoded equipment to cut spending, he said.

The ministry will continue reviewing and adjusting the allocation of funds to maximize the efficacy of weapons systems, Hsin said.

According to the defense spending plan unveiled on Aug. 22 by the Cabinet, the government has earmarked 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 fighter jets and various missile systems and unmanned aerial vehicles.

Despite the combined amount of two special budgets 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 by 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 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, pursuant to the Budget Act, according to the spending plans for the special budgets delivered to the Legislature by the Cabinet.