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Date: 2025-02-25
Source: Department of Information Services, Executive Yuan
The following is a translation of selected portions of the premier's report.
In early 2024, Taiwan's democratic elections took place, followed by the formation of a new government and subsequent efforts by the Executive Yuan and Legislative Yuan to cooperate. Last year, we also witnessed rhetorical attacks, military intimidation and threats of war on the international stage, in addition to experiencing a rapidly changing economic and trade order and the restructuring of industrial supply chains. Nevertheless, through the hard work of our people and collaborative development among industries, we progressed through integration and prospered through adaptation.
To address the future challenges and opportunities facing our nation, the Executive Yuan and Legislative Yuan should—grounded in respect and tolerance—cooperate to advocate for and pass bills that benefit Taiwan and the public. This is the most heartfelt hope of our people. If the Executive Yuan deems that a bill passed by the Legislative Yuan involves significant disputes or is difficult to implement, it may, with the president's approval, seek remedies through constitutional procedures, such as submitting a request for reconsideration or for constitutional interpretation. The Constitutional Court will clarify the matter and safeguard the constitutional order to fortify democracy through democratic practices and strengthen Taiwan's resilience.
During this legislative session, I hope that the two Yuans can prioritize the will of the people and work together to advance bills that benefit the long-term development of our nation, including key bills addressing public needs and concerns, so that Taiwan can continue moving forward.
1. The five major challenges going forward
Population policy: Caring for families is also the nation's responsibility
The latest estimates from the National Development Council highlight our nation's declining birth rate and population, with our population projected to fall below 23 million by 2030. Faced with the dual challenges of a super-aged society and a declining birth rate, industries must address future issues related to labor supply and demand. Given that these challenges contribute to rising social welfare expenditures, the government must take swift action to maintain fiscal stability.
To this end, we will expand investment in social and medical services to alleviate the burden on families, drive future growth through an innovative economy, promote industrial transformation, build a smart nation and support local aspirations by ensuring balanced development across counties and cities. These are the new policies and initiatives we must push forward in response to the demographic shift
Fighting fraud and drugs: Building a safe and resilient Taiwan
On the domestic security front, criminal activities continue to evolve as society progresses. Various ever-evolving fraud tactics, including fake investment opportunities on social media platforms, online shopping scams and fraudulent relationships established for financial exploitation, have become major public safety concerns. Additionally, the entry of emerging drugs into schools has increased the risk of young people being led astray, causing harm to both their health and society. Therefore, strengthening public security to combat fraud and address drug-related issues is essential for improving the well-being of our people.
Talent and workforce: Creating a supportive workplace that balances expectations and reality
According to statistics from the Directorate-General of Budget, Accounting and Statistics, more than 8.45 million people were employed nationwide last year. However, the expectations of workers and the talent demands of enterprises may not always be fully met. For example, will workers across all industries benefit from the ongoing trend of rapid artificial intelligence (AI) development? With the increasing demand for health care and family caregiving, is there sufficient manpower to meet these needs?
Therefore, in addition to raising the salaries of our military personnel, civil servants and public school teachers, the government is encouraging businesses to increase wages. It is actively aligning with the recruitment needs of industries and helping micro-, small and medium-sized enterprises (MSMEs) to transform effectively, accelerating the move toward the comprehensive application of AI. Future talent and labor policies must strike a balance between expectations and reality for workers and provide industries with the talent and resources they need, ensuring that labor supply and demand are met across different industries.
Stable prices: Ensuring steady livelihoods to maintain social stability
In the domestic market, supply and demand are easily influenced by natural disasters, weather and holidays, and are often impacted by fluctuations in international raw material prices. Maintaining stable commodity prices is crucial to fulfilling the government's responsibility of providing peace of mind to our people, and our aim is to keep the annual growth rate of the consumer price index below 2%.
Energy transition: New green energy, new energy saving, new energy storage
With overseas Taiwanese businesses and international corporations expanding their investments in Taiwan, and as the semiconductor and AI industries continue to develop rapidly, protecting the security and stability of our energy supply is not only crucial for meeting our people's needs but also serves as a key foundation for industrial development and national security. As a key player in the global technology supply chain, Taiwan must expand its climate action and intensify its carbon reduction efforts to enhance the international competitiveness of its industries.
We must fully realize Taiwan's second energy transition, which involves developing diverse green energy sources, enhancing industrial energy saving and advancing energy storage technologies. Through cross-ministry and interdisciplinary cooperation, we will work with the private sector to implement an energy strategy centered on prioritizing carbon reduction, with the goal of achieving net zero. This will support green growth for the next generation and the gradual transition to net zero by 2050.
To tackle these key challenges, the government will take concrete steps to achieve eight major policy goals under the guidance of the National Project of Hope, pursuing the vision of a Taiwan with democratic peace, innovation-driven prosperity and just sustainability.
2. Preparing Taiwan for the next stage of development
Expanding social care for youth
To alleviate the burden on young parents raising children, public preschools began offering extended care services on weekdays and extra care services during summer and winter vacations starting last year. Additionally, the government continues to advance the national child care policy 2.0 for children aged zero to under six.
To provide equitable educational opportunities for students, we have continued to narrow the tuition and fee gap between public and private universities and colleges, and we have also implemented free tuition for all senior and vocational high school students.
To support young adults entering the workforce, we have increased the minimum monthly wage to NT$28,590 (US$871.78) and the minimum hourly wage to NT$190 (US$5.79) this year, representing increases of approximately 4.08% and 3.8%, respectively, and marking the ninth consecutive year of wage increases. Additionally, the salaries for military personnel, civil servants and public school teachers have been raised by 3%, in the hope of stimulating wage growth in the private sector.
The government plans to increase overall domestic wages through various innovative strategies, such as promoting pay transparency and introducing tangible incentives for businesses to raise wages.
It has also continued to implement tax reductions, increasing the tax-deductible allowance for basic living expenses, the overall exemption amount, standard deductions and various special deductions for the 2024 income tax year.
To empower youth to boldly chase their dreams on the global stage, the Executive Yuan has approved the Taiwan Global Pathfinders Initiative, providing youth aged 15 to 30 with diverse avenues for international experiences, with individual cases being eligible for subsidies of up to NT$2 million (US$60,985).
To address the work flexibility needs of employees, we are advancing a "dual employment and dual care" model, enhancing the public support system and striving to increase the labor participation rates of women, middle-aged and older adults. This approach encourages their return to the workforce, helping to support Taiwan's economic growth. Regarding the Employment Insurance Act, Civil Servant and Teacher Insurance Act, and Act of Insurance for Military Personnel, we are studying potential amendments that will enable parents who both claim six months of unpaid parental leave allowance to apply for a one month extension, thereby strengthening economic support and encouraging the increased involvement of men in parenthood.
To expand support for younger people and ensure housing equity, the government is strengthening collaborations with the private sector to build various types of social and youth housing, while continuing to implement a program to support 1 million renter households and an NT$30 billion (US$914.8 million) expanded rent subsidy program, with the latter being extended until 2026.
Promoting an innovative economy for industries
We are building the Five Trusted Industry Sectors to make Taiwan an indispensable and reliable partner in the global democratic technology alliance. Through innovation-driven development, we aim to drive the growth of all sectors and industries. By 2028, we expect the output of the semiconductor industry to increase by NT$2.66 trillion (US$81.1 billion) and that of the drone industry to grow tenfold to NT$30 billion (US$914.8 million).
Furthermore, the Executive Yuan will launch Smart Taiwan 2.0, a four-year initiative that focuses on four main areas—smart technology, smart industry, smart governance and smart inclusion—to realize the vision of building a smart technology island and a new digital society.
This year, the government will invest NT$11.6 billion (US$353.7 million) to promote a program for the diversified development and revitalization of MSMEs, assisting those with fewer than 30 employees to undergo digital transformation, achieve net-zero transition and expand their domestic and international market channels.
To support innovative trends and the AI and low-carbon transformations of industries, the Executive Yuan has submitted to the Legislature for deliberation draft amendments to the Statute for Industrial Innovation. Aimed at safeguarding key technologies in our industries and the nation's economic and social security, these amendments include extending tax incentives for equipment through 2029 and expanding the scope of eligible items to cover AI products and services, as well as energy-saving and carbon-reduction initiatives.
The Executive Yuan has also approved a jumpstart program to enhance national talent competitiveness, aiming to strengthen the cultivation of local digital talent while attracting and retaining international talent. As of the end of the previous year, the government has approved the establishment of 20 regional talent and technology development hubs for industries such as semiconductors, electric vehicles, smart machinery and grids, and offshore wind power. We have also granted work permits to 53,770 foreign professionals and approved 17,051 foreign special professionals (including those holding Employment Gold Cards), bringing the total to 70,821. Additionally, we have retained more than 30,000 mid-level foreign technical specialists.
To spur the flow of private capital toward the balanced development of Taiwan's public infrastructure, the government has launched the Trillion NT Dollar Investment National Development Plan and established a Cabinet-level platform for advancing public-private partnerships. The plan will help direct trillions in capital investment to Taiwan's major construction projects and industries.
We also plan to transform Taiwan into Asia's center for asset management while retaining unique Taiwanese features, aiming to attract both domestic and foreign capital, strengthen the asset management industry and raise Taiwan's competitiveness in the Asian wealth management market. Kaohsiung has been selected as the location for establishing a local asset management pilot hub, where financial institutions can operate and trial services for high-net-worth clients, international finance and cross-border finance.
On January 6, 2025, we launched the upgraded Taiwan Innovation Board (TIB) and removed specific restrictions on qualified investors, allowing retail investors to participate in and support the growth of high-quality startups. Furthermore, the government has pushed through a legislative amendment to extend the reduced transaction tax—half the normal rate—on same-day stock trades for an additional three years, maintaining market momentum and fostering the securities market's stable development.
To date, the Three Major Programs for Investing in Taiwan have attracted 1,664 companies, with investments totaling over NT$2.5277 trillion (US$77.1 billion), generating 160,749 jobs in Taiwan. These programs will continue through 2027, expanding to include Taiwanese businesses worldwide and foreign investing enterprises. They will focus on the Five Trusted Industry Sectors, the service sector and the health industry, seeking program participants that will integrate AI elements and gradually implement measures to reduce carbon emissions. We expect the programs to bring in NT$600 billion (US$18.3 billion) in investments and create approximately 40,000 jobs within the next three years.
Developing diverse green energy sources for sustainability
To move toward environmentally sustainable development and accelerate alignment with international carbon reduction trends, the Ministry of Environment has outlined a draft proposal for phase three of the government's greenhouse gas emissions goals. This proposal raises the carbon reduction target for the 2005-2030 period from the original 24% plus or minus 1% to the more ambitious 28% plus or minus 2%.
To refine the carbon pricing system, the government has announced three supplementary regulations for the carbon fee system and carbon fee rates. The carbon fee system is officially launching this year and will accelerate the transition of businesses to low-carbon models.
The government is advancing a second energy transition to maintain the security and stability of the power supply, while making strides toward the vision of a non-nuclear homeland in line with the law. Taiwan's energy mix now consists of 39.3% coal, 42.4% natural gas, 11.6% renewable energy and 4.2% nuclear energy. This indicates a gradual decrease in the share of coal-fired power generation and a gradual increase in that of renewable energy. To bolster the neutrality and independence of green energy trading platforms, the Executive Yuan has submitted to the Legislature for deliberation draft amendments to the Electricity Act, which will bring certain types of power suppliers under regulation to foster the electricity market's healthy development.
Starting this year, the government is allocating NT$4.08 billion (US$124.4 million) over the next four years to promote the Residential Rooftop Solar Energy Installation Acceleration Plan. This will expedite the setup of solar power systems, with an additional 1.2 gigawatts (GW) of capacity expected from rooftop systems installed across Taiwan during this period.
The government's offshore wind power program has officially entered its third phase: commissioning offshore wind companies to carry out zonal development. Five wind farms signed contracts during the first round of development, while five were allocated capacity during the second round. These projects are expected to be completed and integrated into the power grid by 2030.
The government has budgeted NT$24.2 billion (US$737.9 million) this year to continue promoting deep energy saving. Led by state-owned enterprises, this policy will expand the capabilities of the energy service company (ESCO) industry by offering technical consultation and project loan credit guarantees, in addition to providing tax incentives for investment in energy-saving equipment.
Building a healthier Taiwan for our people
The National Health Insurance program has been in operation for 30 years. To continue providing comprehensive care for people of all ages and to contribute to international health and safety institutions, the Executive Yuan is introducing new measures for a "Healthy Taiwan," as follows:
A. We will propose the complete Long-term Care Plan 3.0. Building upon the existing long-term care service coverage of 85.43%, the plan will continue to support aging in place, strengthen integration and connection between medical and care systems, and enhance care for individuals with moderate to severe conditions. This approach will effectively link long-term care, medical, and family caregiver services, ensuring timely assistance for both care recipients and caregivers.
B. This year will see the expansion of integrated inpatient care services, the second phase of a children's health care improvement program, a plan to provide mental health support for individuals aged 15 to 45, and the widening of a pilot program offering integrated care for populations in remote and rural areas.
C. We are expanding cancer screening services, broadening the groups eligible for screening. Additionally, we will establish an NT$10 billion (US$304.9 million) fund for new cancer medicines, with the goal of reducing cancer deaths by one-third by 2030. We are also advancing a medium- to long-term 12-point strategic plan to boost the nation's nursing workforce.
D. We are implementing the 888 Program to prevent and treat high blood pressure, high cholesterol and high blood sugar. This program aims to integrate 80% of patients with these chronic conditions into the care network and provide lifestyle counseling to 80% of those within the network, ultimately helping 80% of patients bring their conditions under control by 2032.
E. To ensure the sustainability of the National Health Insurance system and deliver the highest quality of medical care to the public, NT$33.6 billion (US$1 billion) has been earmarked this year to support the financial stability of the National Health Insurance Fund.
Advancing urban and rural development for a balanced Taiwan
To realize President Lai Ching-te's policy vision of balanced development across Taiwan, the government has designated six major regional flagship projects, each corresponding to a specific region of Taiwan: (1) a "golden corridors" project aimed at developing tech innovation, tourism and marine industries in Taipei, New Taipei, Keelung and Yilan; (2) a "Silicon Valley" in Taoyuan, Hsinchu and Miaoli; (3) a new center for precision machinery and smart technology in Taichung, Changhua, Nantou and Yunlin; (4) a southern "Silicon Valley" in Chiayi, Tainan, Kaohsiung and Pingtung; (5) a "slow living" project focusing on smart agriculture and leisure industries in Yilan, Hualien, Taitung and southern Pingtung; and (6) a low-carbon, sustainable recreation initiative in the outlying islands of Kinmen, Matsu and Penghu.
We are also continuing to carry out over 140 key infrastructure projects in counties and cities across Taiwan, alongside select flagship programs to actively boost local employment, bring prosperous growth to local industries and reduce disparities between the cities and the countryside, the rich and the poor.
In response to intensifying climate change and global warming, the government is allocating NT$55.1 billion (US$1.7 billion) to its overall budget for water management. We will continue to deploy new water management strategies, develop new water supplies and reduce water leakage, ensuring that Taiwan's water resources stay sufficient and secure.
The government also continues to promote the Water Leakage Rate Reduction Plan. Starting this year, the plan will invest NT$80.8 billion (US$2.5 billion) over eight years, with the goal of lowering the leakage rate to 10% by 2031.
Safe, fast and convenient transportation networks—including railways, highways, airports and seaports—are vital infrastructure that local communities desire. For example, the extension of the Taiwan High Speed Rail system into Pingtung County will create a new development zone between Kaohsiung and Pingtung, while establishing an important gateway to facilitate exchange with countries under Taiwan's New Southbound Policy.
We are also committed to developing sustainable agriculture while ensuring food security and autonomy. This year, Taiwan is set to become the first and only country in Asia free from three major swine diseases: classical swine fever, foot-and-mouth disease and African swine fever. Last year, premium Taiwanese fresh pork returned to the Singapore market after a 15-year absence, and we have successfully started exporting farmed tiger groupers and red dragon fruit to Japan.
Creating an international brand to promote Taiwan's national image
The government has allocated its highest-ever culture budget this year, which will support 12 cultural programs. These include efforts to integrate arts and culture at the grassroots level, making it easier for children and youths to engage with them, as well as initiatives to spur cultural exports and exchanges across various fields. Additionally, the government will establish 100 "cultural bases," creating a network of community development centers, museums, local culture halls, living art centers, performing arts venues, exhibition halls, bookstores and more. This will foster a cultural industry of substantial economic scale through travel and tourism.
Beginning this year, the Ministry of Culture will also promote several initiatives, including a 2025-2030 publishing industry revitalization plan and the Reconstruction of Taiwan's Art History 2.0 project (2025-2028). These efforts aim to expand cultural content and stimulate a "Taiwanese Wave" pop culture export economy. In addition, the "one plus four T-content plan" will strengthen Taiwan's content creation capabilities, establish the Tainan Film Studio to cultivate talent, and produce film and television that focus on unique Taiwanese elements while holding potential for international development.
Whether at the Paris Olympics, Paralympics or WBSC Premier12 baseball tournament, Taiwanese teams and athletes delivered incredible performances that amazed the world last year. To further encourage the overall development of sports in Taiwan, the government will soon establish a brand-new ministry of sports this year. Its organizational structure will include a sports-for-all administration, as well as the existing National Sports Training Center, the existing Taiwan Institute of Sports Science and an upcoming national sports industry development center. The ministry will invite a diverse range of professionals, including athletes, to help achieve its ambitious goals.
Taiwan is striving for both growth and stability to ensure a healthy post-pandemic recovery for tourism. The government will continue promoting cross-ministry operations and resource sharing to reinvigorate the domestic tourism industry and achieve the goal of welcoming 10 million visitors to Taiwan this year.
Protecting cultures and rights for diverse communities
Across the islands of Taiwan where we all live together, different cultures are equal, and diverse languages can serve as shared means of communication.
In addition to the ongoing "Indigenous Project of Hope," the Executive Yuan is also promoting the expanded revitalization of Hakka village environments and the establishment of 22 Hakka village community centers. These efforts aim to promote linguistic and cultural heritage, as well as the development of Hakka arts and culture.
New immigrants bring fresh vitality to society, and they are an integral part of Taiwan's households, workplaces and economy. Recognizing this, the Executive Yuan has approved a pilot program to develop a more robust interpretation services system, improving care and safeguarding the rights of new immigrants.
Transitional justice is fundamental to democracy and fairness, and it is also the government's legal duty. On January 3 of this year, amendments to the Act to Restore Victim's Rights Infringed by Illegal Acts of the State During the Period of Authoritarian Rule were promulgated, ensuring that recipients receive compensation or restitution of assets without impacting their eligibility for social welfare. The Executive Yuan has also submitted to the Legislature for deliberation a draft bill for the preservation of historical sites of injustice. We hope the bill will garner support across political lines and serve as a reminder of the lessons learned during Taiwan's period of authoritarian rule.
Upholding security and defense for a stronger Taiwan
Fighting crime—whether organized crime, financial crime, gun crime, drug crime or fraud crime—and protecting social order are the government's most important responsibilities. To combat the scams plaguing the public, the Executive Yuan has established its own anti-fraud command center. Furthermore, the government has begun formulating related regulations for four recent pieces of anti-fraud legislation, launched version 2.0 of its next-generation anti-fraud strategy guidelines, required online platform advertisers to register using their real names, and enhanced the functionality of the "165" Anti-Fraud Dashboard website.
To meet the threat of emerging drugs, the government has reclassified etomidate as a category two narcotic, enabling stronger penalties and enforcement tools that will prevent the drug from endangering young people and public health. This year, we are investing NT$15 billion (US$457.4 million) into phase three of the New Generation Anti-Drug Strategy Guidelines, which includes initiatives such as leveraging technology to enhance drug enforcement, tightening border controls, upgrading testing capabilities and preventing drugs from entering school campuses, with the goal of creating a future where homes and schools are drug-free.
Regarding road safety, the government continues to implement its plan to sustainably enhance pedestrian safety. Various accident statistics have shown a decrease in the short term. We will continue to monitor the plan's effectiveness and proactively improve road traffic safety.
To safeguard national cybersecurity, the Executive Yuan has announced a comprehensive ban on the use of DeepSeek AI services in the public sector, in adherence with the principle of restricting the use of products that jeopardize national information security. In addition, to ensure smooth external communications and prevent harm from grey-zone intrusions, the Executive Yuan has approved the designation of 10 domestic submarine cables as critical infrastructure, including the undersea cables connecting the Matsu Islands with Taiwan proper. This will enable greater investment of resources into their maintenance, as well as swifter repair and activation of backup measures when needed.
Last year, the Chinese Communist Party (CCP) conducted numerous targeted military exercises and provocations in the area surrounding Taiwan, severely disturbing regional peace and the stability of the Taiwan Strait. Furthermore, it has repeatedly used methods including disinformation and cognitive warfare, attempting to influence military and civilian morale in Taiwan. To defend our national sovereignty, the Office of the President established the Whole-of-Society Defense Resilience Committee, which brings together the power of the government and the people to comprehensively strengthen our resilience in the areas of national defense, economic livelihoods, disaster prevention and democracy. Our government has also been proactively cultivating defense autonomy, including research and development into cutting-edge defense technologies and weapons systems autonomy. Regarding domestic production of military aircraft, a total of 42 new-model advanced jet trainers have been delivered as of the end of February this year. The new-model Da Wu-class rescue and salvage ship was delivered in October last year, and the indigenous submarine "Hai Kun" is now undergoing harbor acceptance tests (HATs), with delivery expected this November. Moreover, in light of the effective new forms of asymmetric warfare enabled by drones, the government is continuing to acquire various types of drones and drone countermeasures through diversified channels to strengthen Taiwan's overall defense capabilities.
Democracy in Taiwan represents not only a way of life rooted in freedom, but also a diplomatic brand that wins the trust of our allies and the international community. We pursue a strategy of integrated diplomacy, combining both values-based diplomacy and economic diplomacy, to capitalize on Taiwan's economic strengths and continue deepening substantive cooperation with our allies and like-minded partners, including the U.S., Japan and European nations, while expanding our global reach.
On the topic of cross-strait relations, we firmly support healthy and orderly exchanges in the areas of culture, education, economics, trade and tourism, based on the principles of parity and dignity. However, the CCP's continued military coercion against Taiwan is not only undermining regional security and stability, but also acting as the major cause of tension in the cross-strait relations and destabilizing peace in the region. In the face of threats from the CCP, Taiwan's government is actively implementing President Lai's Four Pillars of Peace action plan to strengthen national defense, economic security, supply chain resilience and social resilience. We stand resolute in safeguarding our national sovereignty and democratic freedoms, protecting all citizens, and working hand-in-hand with the global democratic community to jointly maintain stability in the Taiwan Strait and security in the Indo-Pacific.
3. Unity is more important than anything
The central government's 2025 general budget was planned at the scale of NT$3.1325 trillion (US$95.5 billion), an increase of NT$280.6 billion (US$8.6 billion) over the previous year, due to the addition of many new items, including funding for public infrastructure, national defense, National Health Insurance, the Healthy Taiwan initiative, national cancer prevention programs, social housing development through a government housing fund, the National Pension Program, science and technology development programs, and funding for child care and other services for children aged two to under six. As the economy grows rapidly, public services must also expand accordingly. The government has a duty to serve to its full ability and advance at full speed, so as not to betray the hard work of its people.
I have always firmly believed that the ruling and opposition political parties must reconcile and coexist; only then can we smoothly advance laws that benefit our nation and our people. Cross-strait relations should pursue peace and mutual prosperity under the principles of parity and dignity; only then can we ensure peace and stability across the Taiwan Strait. Taiwan must work closely and proactively with the whole world in the spirit of mutual benefit; only then can we achieve win-win cooperation. My administrative team and I have always stood by the ideals of good-faith communication and putting the people first, as we continue to advance discussions with the Legislature and legislative members. We hope that, under the basic premises of upholding constitutional order and protecting the people's constitutional rights, we can do what is best for the well-being of all people in the nation.
In the face of rapidly shifting global affairs and numerous severe challenges, the Republic of China (Taiwan) holds an optimal strategic position. We lead with advanced technology, the transformation of MSMEs, a strong public health system, diverse cultural heritage, high productivity and harmonious labor relations. If only our political parties join hands and cooperate, we can unite Taiwan and expand our global presence, ushering in the pinnacle of this new era of Taiwan's strength.
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