Speaker Han, Deputy Speaker Chiang, esteemed members of the Legislature:
On behalf of my executive team, I have been invited to deliver a policy report today to the sixth session of the 11th Legislative Yuan. I hereby present this concise report on the government's recent accomplishments and the nation's future outlook.
In recent years, the global acceleration of artificial intelligence (AI) infrastructure development has catalyzed Taiwan's economic transformation and growth. In 2025, the nation's economic growth rate was 8.76%. This year, that growth is expected to reach double digits, with the annual rate projected to reach 11.05%, placing Taiwan ahead of neighboring countries and first among the Four Asian Tigers (Taiwan, Hong Kong, Singapore and South Korea). At the same time, the domestic job market continues to improve; the average unemployment rate from January through July this year was 3.32%, the lowest level since 2001. In the 2026 World Competitiveness Ranking, published by the Swiss-based International Institute for Management Development, Taiwan rose two places to rank No. 4 globally, reflecting the overall strengthening of our national capabilities.
Last year, we successfully launched Chi Po-lin, the first satellite in Taiwan's indigenously developed FORMOSAT-8 satellite constellation program and the first to incorporate AI. Hai Kun, the nation's first domestically built submarine, is also undergoing submerged trials.
Our semiconductor industry, which first grew out of Hsinchu Science Park, has expanded to Central Taiwan Science Park and Southern Taiwan Science Park, and is now establishing production bases across three continents. This global reach was also evident at the 2026 FIFA World Cup, where 23 of the 48 participating teams wore jerseys made with Taiwanese functional fabrics.
Compared with other countries, Taiwan is neither large in territory nor population, nor rich in natural resources. Yet, from outer space to the oceans, from high-tech to traditional industries, and from our infrastructure to our democracy, we have achieved remarkable success.
Six major policy directions
1. Tech leadership and smart development
AI is not only vital to Taiwan's technological leadership, but also provides solutions for many of the nation's challenges in the future. The central government's general budget proposal for 2027 allocates NT$229.2 billion (approximately US$7.2 billion) to technology development programs, a 12.7% increase over the current year's budget.
In 2025, Taiwan's semiconductor industry achieved an output value of NT$6.8 trillion (approx. US$213.3 billion), accounting for 70% of the global output for advanced-process manufacturing. The government will continue to promote the integrated circuit (IC) design industry and help develop innovative, high-performance chips that can drive growth across all sectors, thereby reinforcing Taiwan's key position in the global chip supply chain and securing critical R&D and manufacturing capabilities for AI development.
Leveraging our advantages in hardware manufacturing, we will further strengthen software and application development. Through the government's Ten AI Initiatives Promotion Plan, we will realize the goal of creating smart living environments for all. With regard to smart applications, we will prioritize their deployment in pilot sectors, including medicine and transportation, to demonstrate their effectiveness, and we will raise the adoption rate of AI in the manufacturing and service sectors to 50% by 2028. Regarding key technologies, we've begun building a high-speed silicon photonics verification laboratory and set up the National Center for AI Robotics at Tainan's Shalun Smart Green Energy Science City. In terms of digital infrastructure, we are building the Taiwan Sovereign AI Training Corpus, using education, medicine, finance and the judiciary as pilot fields to demonstrate Taiwan's sovereign AI capabilities.
Furthermore, adopting the Ten AI Initiatives Promotion Plan as its core blueprint and building upon the Five Trusted Industry Sectors, the government has designated 13 strategic industries to lay the foundation for Taiwan's national strength over the next 10 years. These industries include silicon photonics and quantum technology, which are helping to expand Taiwan's high-performance computing and computing-capacity centers. We are also bolstering investment in R&D for AI robotics and unmanned vehicles.
The government's comprehensive program to develop the unmanned vehicle industry will invest a projected NT$44.2 billion (approx. US$1.4 billion) through 2030. Currently, about 274 domestic companies are involved in the drone sector. Driven by the joint efforts of private business and government policy support, Taiwan's drone industry output value jumped from NT$5 billion (approx. US$156.9 million) in 2024 to NT$12.9 billion (approx. US$404.7 million) in 2025.
Through such efforts, the government's 13 strategic industries aim to proactively build the groundwork for economic security and financial development, incorporating sectors such as critical minerals, biotechnology and medical care, while advancing the Asian Asset Management Center initiative to attract international capital and talent and fully fortify Taiwan's leading position in the technology and financial sectors. The 13 strategic industries will also promote urban renewal, sports, cultural and creative industries, and a trillion-NT-dollar tourism industry, thus enhancing the resilience of the domestic market.
2. Transformation and sustainable growth
The ultimate goal of developing advanced technologies and AI should remain the improvement of people's well-being.
Last year, the Micro-, Small, and Medium-sized Enterprise (MSME) Diversified Revitalization and Development Plan yielded initial successes. The government is now updating the Act for Development of Small and Medium Enterprises to cover the upgrading and transformation of MSMEs, providing greater policy stability through legal codification. An additional NT$100 billion (approx. US$3.1 billion) will also be invested over the course of eight years, bringing the initiative's annual budget up to NT$25 billion (approx. US$784.3 million). This will ensure broad-based assistance for MSMEs—including factories, commercial districts, traditional markets, night markets, agribusiness, tourism and startups—and advance the comprehensive upgrading and transformation of domestic industries.
Smart technologies are spurring the modernization of agriculture. The government is investing NT$7.4 billion (approx. US$232.1 million) in the second phase of a cold chain logistics program. A new agricultural product processing and cold chain logistics center in Yujing District, Tainan, is expected to finish construction in September this year. Upon completion, it will be the nation's largest cold treatment facility.
Taiwan's energy transition is also driving industrial upgrading. This year saw the addition of four new gas-fired generation units, increasing installed capacity by 5.2 gigawatts (GW). Taichung Power Plant's first gas-fired unit is expected to officially begin commercial operation by the end of September, while its second unit is expected to be ready for dispatch by the end of October. This progress reflects our shift from coal to gas, balancing a stable power supply with carbon reduction and pollution control.
In 2025, Taiwan's cumulative installed offshore wind capacity ranked fifth worldwide. More than 510 offshore wind turbines have been installed to date, with grid-connected capacity reaching 4.9 GW. The Medium- and Long-Term Offshore Wind Power Development Plan for 2026-2039 is expected to add another 15-18 GW of developable capacity.
At present, total installed solar photovoltaic capacity stands at about 16.18 GW, as we continue to advance toward our solar policy target of 20 GW.
3. Equitable distribution and shared prosperity
To ensure that everyone shares in the benefits of Taiwan's AI-driven growth, the central government's 2027 general budget proposal allocates NT$235.7 billion (approx. US$7.4 billion) for a one-off cash payment of NT$10,000 (approx. US$314) to every person next year. This payment is made in accordance with the principles of fiscal sustainability, without requiring additional borrowing or encroaching on existing government programs.
Enhancing protections for low-income workers is an important policy priority. The monthly minimum wage will be raised next year to NT$30,900 (approx. US$969) and the hourly minimum wage to NT$205 (approx. US$6.43). The government has approved raises to the national minimum wage for 11 consecutive years since 2016, resulting in cumulative increases of over 54% and 70% in the monthly and hourly wages, respectively.
Taiwan faces the twin challenges of a declining birth rate and an aging population, which have sharply increased the financial burden on the Labor Insurance and National Health Insurance systems. Our 2027 general budget proposal allocates NT$130 billion (approx. US$4.1 billion) to the Labor Insurance Fund and NT$60 billion (approx. US$1.9 billion) to the National Health Insurance Fund to guarantee their financial stability. The Executive Yuan also put forward amendments to the Labor Insurance Act, which were promulgated and took force in January, stipulating that the central government assumes ultimate financial responsibility for the Labor Insurance system.
Raising the pay of military personnel, civil servants and public school teachers helps to improve government effectiveness and strengthen the public sector's competitiveness in attracting and retaining talent. Thus we increased professional allowances and supervisory allowances by a flat NT$2,000 (approx. US$63) starting from July this year, and approved a 4% salary increase for next year.
To foster balanced development across Taiwan, next year's general budget proposal allocates NT$227.1 billion (approx. US$7.1 billion) toward 152 local infrastructure projects under the Six Major Regional Industries and Living Perimeters initiative. The initiative is expected to boost industrial output by NT$17.3 trillion (approx. US$542.7 billion) by 2030. Key projects include the Danjiang Bridge, which officially opened to traffic in May this year. A High Speed Rail (HSR) extension to Yilan was approved in July, and we're now actively advancing the construction of standard factory buildings for the third phase of Yilan Science Park. Taoyuan International Airport's Terminal 3 is scheduled for completion at the end of next year. The National Center for Geriatrics and Welfare Research was inaugurated in May, the first of its kind in Taiwan. An HSR extension to Pingtung is expected to complete its environmental impact assessment by the end of next year. The double-track electrification of railways in the Hualien-Taitung area will be achieved by 2031. A long-term care and general medical building at Penghu Hospital is on track to finish construction by the end of 2030. One by one, as these major infrastructure projects reach the finish line, they will generate new opportunities for industrial growth while enhancing local amenities and quality of life.
4. Expanded social welfare and a healthier Taiwan
On the second anniversary of his inauguration, President Lai Ching-te announced a set of 18 family support measures as part of the government's new population strategy for Taiwan. Focusing on five priority areas, the strategy allocates NT$373 billion (approx. US$11.7 billion) to establish a comprehensive family support system, with full implementation expected next year. The five priority areas are:
Ensuring a secure start for families: A monthly allowance of NT$5,000 (approx. US$157) will be provided for each child from birth until age 18. For children aged 6 to under 18, half of this allowance will be deposited each month into a dedicated growth account, giving them their first nest egg for adulthood.
Strengthening child care: The national child care policy 2.0 for ages 0-6 will continue, allowing families to receive both childrearing allowances and the aforementioned growth allowances concurrently.
Increasing investment in education: The government has reduced student loan interest rates by 1 percentage point, from 1.775% to 0.775%, and extended student loan grace periods from one year to two years, while continuing to implement tuition-free education for all students from elementary school until senior or vocational high school; subsidize tuition and fees for college and university students; and provide campus housing allowances for higher education students.
Promoting family-friendly workplaces: Marriage leave will be extended to 14 days. Based on the Executive Yuan's proposed legislation, paternity leave and leave to accompany a spouse to prenatal appointments will be increased to a combined 14 days; maternity leave will be lengthened from eight to 12 weeks; infant care leave will be upgraded to a broader child care leave system with wider age eligibility and double the amount of flexible single-day leave; and for households with children under age seven, if both parents each take six months of unpaid parental leave with allowance, then each parent will become eligible for a further three months of allowance.
Easing housing pressures: The share of social housing units reserved for newlyweds and families with children will be gradually increased from 20% to 40%, enabling households with children aged 0 to 6 to access stable, long-term housing for lease terms of up to 12 years.
Furthermore, new legislative amendments have raised the tax exemption for taxpayers with dependent minor children by 50%, applicable to tax filings beginning next year.
To bolster support for vulnerable groups, the government is increasing six key social welfare allowances by 23.5%, while also raising the monthly welfare allowance for elderly farmers to NT$10,000 (approx. US$314) and the basic monthly benefit under the National Pension to NT$5,000 (approx. US$157).
To build a healthier Taiwan where people can age with happiness and dignity, we are allocating NT$115.3 billion (approx. US$3.6 billion) this year to the Long-term Care Plan 3.0, expanding its target population and scope of offerings. Beginning this September, subsidies for residents of long-term care facilities have increased.
This year NT$6.885 billion (approx. US$216 million) has been allocated for a 12-point strategic plan to boost the nation's nursing workforce, with an additional NT$2.55 billion (approx. US$80 million) earmarked to expand the Inpatient Integrated Care Program to reduce the workload of nursing personnel. We are also strengthening the resilience and preparedness of the nation's medicinal drug supply, promoting the prevention and treatment of the "three highs" (high blood pressure, high blood sugar and high blood lipids), improving pediatric health care and boosting mental health support for people aged 15 to 45. To advance preventive health care, we are launching the Health Coin initiative this October in collaboration with the private sector, which provides redeemable digital tokens to encourage healthy lifestyle activities and improve public health.
5. Educational investment and cultural tourism
The Executive Yuan has proposed amendments to the National Sports Act to promote competitive sports for all, grow community-based sports industries and advance sports diplomacy, with the aim of cultivating a more diverse and inclusive sports culture. In line with our sports-for-all policy, the Sports Coin initiative was introduced to encourage everyone to develop healthy exercise habits.
To promote youth engagement in cultural activities, the Culture Points program was expanded this year to cover individuals aged 13 to 22, with each recipient receiving NT$1,200 (approx. US$38) worth of points. We will continue the Culture Base policy, which highlights key cultural sites across Taiwan, along with a visionary plan to boost marketing and publicity support for Taiwanese films and bring audiences back to theaters. We're also moving forward with the development of new cultural venues, including the National Museum of Modern Art Tainan, National Children's Future Museum and National Railway Museum.
We will continue implementing the Six Hakka Arrows policy to promote Hakka culture. Version 2.0 of the Hakka Coin program launched this year, extending its coverage to more venues, incentivizing use of the Hakka language, and stimulating tourism in Hakka communities.
The Pingpu Indigenous Peoples Status Act was promulgated and took effect last year as part of efforts to uphold the constitutional rights of indigenous peoples to identity and culture, and in July this year, the Executive Yuan formally recognized the Siraya as an indigenous group. Eight other groups have also applied for official recognition and are currently awaiting review.
The NT$10 billion (approx. US$313.7 million) Taiwan Global Pathfinders Initiative is supporting 110% more participants this year than it did last year, while broadening access for youth from disadvantaged backgrounds.
To improve students' AI literacy and the ability of primary and secondary school teachers to integrate AI into teaching, we are implementing the AI Talents Ark Project, focused on three key areas: building AI learning environments, cultivating cross-disciplinary AI educators and strengthening data-driven analytics and decision-making.
Driven by the ambition of building a NT$1 trillion (approx. US$31.4 billion) tourism industry by 2030, we are stepping up efforts to develop Taiwan's tourism sector, including the establishment of the Taiwan Tourism Institute in July this year as a national think tank and a platform for collaboration among government, industry and academia. Through a program that integrates cross-regional and cross-sector resources, the government is advancing 10 key initiatives to create a tourism corridor encompassing areas on and south of the Tropic of Cancer, with a focus on history, culture, marine ecology and slow-living experiences.
6. Security resilience and combating crime
With climate change bringing increasingly uneven rainfall and more extreme drought and flooding, the government is implementing a program to strengthen water security by linking the entire nation's reservoirs and dams into an integrated network. Eleven of the 16 pipelines planned under the program have been completed, with the network expected to further enhance flexibility in water resource allocation and strengthen the resilience of Taiwan's water supply once fully completed.
For flood management, NT$100 billion (approx. US$3.1 billion) will be invested over four years in a program to provide local governments with the necessary support to improve rivers and drainage systems in response to climate change.
To keep our communities safe, the government is sparing no effort to combat drug manufacturing and trafficking, and is taking tougher action against drug-impaired driving. To this end, the Executive Yuan established a task force to combat organized crime and drugs, deploying all appropriate measures to curb illegal activities, while undertaking a comprehensive review and revision of relevant laws. We respectfully call on the Legislative Yuan to swiftly complete its review of the relevant submitted bills and upgrade the legal framework for preventing drug-related offenses and drug-impaired driving.
Version 2.0 of the government's next-generation anti-fraud strategy guidelines is driving intensified efforts to combat fraud, and since the launch of the 165 Anti-Fraud Dashboard website, the nationwide daily average of reported telecommunications and online fraud cases has fallen by approximately 44%. We are also working with financial institutions to advance police-bank cooperation in combating fraud. Last year, these efforts helped stop over 19,000 suspected fraudulent transactions, preventing NT$13.7 billion (approx. US$429.8 million) in losses.
Amid China's multifaceted pressure on Taiwan, our government remains committed to safeguarding national dignity and security. To address China's use of transnational repression—including through the Provisions of the State Council on Exit and Entry Administration, which took effect on September 15, and the Ethnic Unity and Progress Promotion Law—our government is actively implementing President Lai's 17 national security response strategies and his national security action plans to safeguard democratic Taiwan. Draft amendments to the National Security Act, the Act Governing Relations between the People of the Taiwan Area and the Mainland Area and other relevant legislation have already been submitted to the Legislative Yuan for deliberation, and we respectfully urge the Legislature to pass them swiftly to safeguard national sovereignty, protect our people and uphold Taiwan's interests.
Investing in national defense is investing in peace. China's increasingly routine military exercises and gray-zone activities in recent years have placed sustained pressure on our nation, posing a threat to our national security while also creating broader challenges for peace and stability in the region. We will continue to build up our joint military capabilities, and next year, we will allocate NT$1.1225 trillion (approx. US$35.2 billion) to national defense, marking the first time that our defense budget exceeds NT$1 trillion (approx. US$31.4 billion) and keeping defense spending above 3% of the nation's gross domestic product (GDP). This underscores our commitment to strengthening our self-defense capabilities.
The Special Act on the Procurement Project to Safeguard National Security and Strengthen Asymmetric Capabilities, and the Act on Strengthening Defense Autonomy and Developing the Unmanned Vehicles Industry have both passed their third and final readings by the Legislative Yuan. The Ministry of National Defense has allocated NT$55.9 billion (approx. US$1.8 billion) to procure three types of military hardware—coastal surveillance and reconnaissance drones, coastal attack drones and small one-way attack unmanned surface vessels—with the funding included in the central government's supplementary budget proposal for this year. We hope that the Legislative Yuan will expedite its review of this year's supplementary budget and complete deliberations on next year's central government budget as scheduled, working with the Executive Yuan to bolster national defense and promote industrial upgrading in the defense sector.
Guided by President Lai's vision of advancing values-based diplomacy and building an economy that spans the globe, the government is pursuing an integrated diplomacy strategy and promoting eight areas for international cooperation under the Diplomatic Allies Prosperity Project. This approach has helped reinforce Taiwan's strong ties and partnerships with countries around the world. We recently signed a Taiwan-U.S. Memorandum of Understanding (MOU) on investment cooperation, a Taiwan-U.S. Agreement on Reciprocal Trade (ART), and the Joint Statement on the Pax Silica Declaration and U.S.-Taiwan Cooperation on Economic Security. Taiwan-Europe relations have also continued to gain momentum, as evidenced by the 86 delegations comprising more than 500 European officials and dignitaries who visited Taiwan last year. In September this year, the European Parliament passed a resolution affirming Taiwan's defense resilience and technological capabilities, while urging closer cooperation with Taiwan and other like-minded partners.
Conclusion
The Executive Yuan has submitted its 2027 general budget proposal to the Legislative Yuan for deliberation. For the coming fiscal year, revenues and expenditures are balanced at NT$3.9266 trillion (approx. US$123.1 billion) with no net borrowing. Notably, next year's social welfare spending will total NT$1.3438 trillion (approx. US$42.2 billion), marking a sharp 34.4% increase from this year's budget and underscoring the government's commitment to providing comprehensive care and support for the public.
With energy prices rising amid conflict in the Middle East, state-owned enterprises, transportation services and agricultural programs froze or moderated price increases in line with government policy to cushion the impact on the economy and people's livelihoods. The Executive Yuan has also submitted a draft supplementary budget for the 2026 fiscal year to help maintain price stability and ease the pressure on household costs.
