TAIPEI (Taiwan News) — President Lai Ching-te (賴清德) announced Thursday the government’s budget proposal for next year following months of discussion.

The president said the NT$3.35 trillion (US$109.8 billion) plan comes amid shrinking revenues due to a new fiscal law and tariff uncertainty with the US. However, he added, it will balance fiscal discipline with promises to improve people’s lives, per CNA. The draft was passed at a Cabinet meeting but will still need to be sent to the Legislative Yuan.

Lai outlined five priorities for the fiscal year. First is fiscal discipline, and despite revenues falling by NT$302.5 billion to NT$2.86 trillion, spending will remain under control with debt capped at 26.5% of GDP. He said this balance shows the government can manage challenges without abandoning responsibility.

Second is defense. Lai said Taiwan’s defense budget will rise 20.1% to NT$949.5 billion, or 3.32% of GDP, when special funds are included. He said this demonstrates Taiwan’s will to strengthen self-defense.

Third is social welfare. The Ministry of Health and Welfare’s budget will expand by NT$20.3 billion, with a NT$10 billion cancer drug fund now in place. Long-term care spending will also jump nearly 25%, including higher subsidies for institutional care, fulfilling a key campaign promise.

Fourth is industrial development. The government will boost funding for five trusted industries by NT$6.6 billion and raise AI project budgets by 85% under the “Ten Major AI Infrastructure Projects.” Lai said these measures will help Taiwan stay competitive in global supply chains while supporting small businesses.

Fifth is social resilience. Flood control spending will climb 52.4% to NT$53.7 billion, while anti-fraud funding will rise 26.5% to safeguard assets. Sports funding will jump 40.9% with the new Ministry of Sports, and nearly NT$300 billion will go toward balanced regional development.

Lai said the budget’s purpose is to meet people’s expectations and secure a better future for Taiwan.