(Bloomberg) -- Taiwan’s government warned that its collaboration with global semiconductor companies could suffer if a controversial budget revamp proceeds, adding to its criticisms of broad legal changes sought by the opposition.
The changes to budget rules would hurt R&D collaboration with firms such as Nvidia Corp. and Advanced Micro Devices Inc. because the government would be forced to cut subsidies, Chiou Chyou-huey, head of the Department of Industrial Technology, said Tuesday at a press briefing in Taipei.
“These projects last multiple years and the government has already signed contracts with these foreign companies,” said Chiou, who added that the firms would question Taiwan’s reliability if the government failed to keep its promises.
The comments highlight the Taiwan government’s concerns with an opposition plan to drastically reshape how tax funds are used in Taiwan. On Monday, the Cabinet said the changes could mean the budget for next year has to be redone. That plan includes a record amount of funding for the military to deter China, which wants to bring Taiwan under its control eventually, by force if necessary.
If the budget revamp that was passed last week becomes law, the central government would get 60% of tax revenue and the local level 40%, according to the Central News Agency. That would mark a big shift from the current arrangement, which sees the center get 75%, and cities and counties the rest.
The opposition Kuomintang has said budget rules needed to be redone because funding was concentrated at the central level and local governments needed more fiscal independence.
The ruling Democratic Progressive Party has accused the opposition of trying to make a host of legal changes to undermine President Lai Ching-te, who took office in May. A few thousand DPP supporters gathered outside the legislature Friday to voice their anger over the KMT-led opposition approving the legal changes.
Also on Tuesday, lawmakers blocked all seven of Lai’s nominees for a top court, a move that widened the opposition’s efforts to derail his agenda. The rejections included law professor and human rights expert Chang Wen-chen, who had been nominated as president of the judiciary.
The move could paralyze the Constitutional Court because an amendment approved by the opposition last week requires at least 10 justices be seated to hand down rulings and the body now has only eight due to retirements.
The vote underscores the challenges facing Lai, whose DPP kept the presidency in January elections but lost its legislative majority. The Constitutional Court has already served as a critical check on legislative actions designed to obstruct his administration.
In October, it rejected a change that granted lawmakers greater power to scrutinize the executive branch, offering Lai much-needed relief as he navigates governance challenges in Taiwan, one of the key flashpoints in US-China relations.
DPP caucus leader Ker Chien-ming said Tuesday the ruling party will ask the court to decide on the legality of the amendment regarding the apex court, CNA reported. In the meantime, the party would ask the court to issue an injunction preventing it from immediately taking effect, he said.
The Presidential Office said in a statement that it deeply regretted the result because it “means it’ll be hard to maintain the normal operations” of the judiciary and the apex court.
The president would choose more people for the court and hoped that lawmakers would approve them in a timely manner, the office added.
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