Japan’s plans for a huge defence spending boost face a US$44 billion shortfall

Prime Minister Fumio Kishida has pledged 43 trillion yen in defence outlays over the period to 2027 as he seeks to bolster Japan’s capabilities

That’s reportedly set to include more money for missiles, new ammunition depots and a greater military presence in the country’s southernmost islands

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Japan’s Prime Minister Fumio Kishida rides atop a tank during a military review at the Japanese Ground Self-Defence Force’s Camp Asaka in Tokyo last year. Photo: Jiji Press via AFP

Published: 12:02pm, 14 Dec 2022

Japan needs to find another 6 trillion yen (US$43.9 billion) to fund a promised expansion in defence spending over the five years starting from April, according to documents seen by reporters.

Prime Minister Fumio Kishida has pledged 43 trillion yen (US$315 billion) in defence outlays over the period to 2027, seeking to bolster Japan’s capabilities amid growing threats from North Korea, China and Russia. That’s an unprecedented increase compared with an initial plan for 25.9 trillion yen in military spending.

About 11.1 trillion yen of the extra requirements will come from non-tax revenues, including the government’s foreign exchange funds account and its share in a large commercial building in central Tokyo, as well as spending cuts and surpluses. That leaves a shortfall of about 6 trillion yen, the documents show.

Japanese F-2 fighter jets fly in formation with US F-16s and B-1B bombers during a joint drill off Japan’s southern island of Kyushu last month. Photo: Japanese Defence Ministry Handout via Reuters

Kishida said at the weekend he wouldn’t rely on bond issuance to cover defence costs in the longer term, but would increase taxes in stages starting in fiscal 2024.

He has faced opposition from two cabinet members, who have urged caution about raising taxes as the government pushes for wage rises and a virtuous economic cycle.

The government is also considering bond issuance to cover part of the increase in outlays, national broadcaster TBS reported earlier.

Tokyo will soon outline its plans to drastically expand its defence capabilities, with key changes set to include more money for missiles that can be used to destroy enemy launch sites that threaten Japan – or what it terms “counterstrike capacity”.

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