One of the highlights in Japan’s three national security documents released on 16 December 2022—the national security strategy, the national defence strategy and the defence build-up plan—is the commitment to increase defence spending.
The defence build-up plan revealed that the Japanese government will spend approximately 43 trillion yen (US$310 billion) from 2023 to 2027 on defence capability. Japan’s Ministry of Defence budget will increase annually to reach 8.9 trillion yen (US$64.1 billion) in 2027. The 2023 defence budget demonstrates Tokyo’s determination to follow through on its five-year spending commitments under the defence build-up plan. The total budget of more than 6.6 trillion yen (US$47.5 billion) is a 27.5% increase from 2022 and the biggest defence budget in Japan’s post-war history.
But the ‘roughly 2% of GDP’ goal that Prime Minister Fumio Kishida discussed in his press conference following the release of these three documents is slightly misleading. The 2% includes not only the defence budget but also other national-security-related spending such as the Japan Coast Guard budget and national infrastructure investments.
Still, the 2023–2027 budget plan is 60% higher than the 2018–2022 spending plan. As a country that historically spent roughly 1% of its GDP on defence and resisted calls to spend more, Japan has marked a departure from the past in committing to such a considerable increase.
Highlights from the three documents—such as Japan’s acquisition of counterstrike capabilities—have grabbed news headlines. But funding remains a thorny issue. The Liberal Democratic Party–Komeito ruling coalition has been working on fiscal measures that will enable Tokyo to follow through on its defence spending commitments.
In December, based on the LDP–Komeito approved outline, the Ministry of Finance included ‘tax measures to secure financial resources for strengthening defence capabilities’ in its seven-point 2023 tax reform proposal.
The coalition introduced the Defence Fiscal Resource Bill to the National Diet in February. The bill provides the fiscal framework through which the Japanese government will fund the defence spending increase—which is essentially a mixed package of the establishment of the defence enhancement fund and the incremental phased increase of corporate, personal income and tobacco taxes. The bill passed the House of Representatives on 23 May and, following approval by the House of Councillors on 16 June, became law.
The opposition parties, including the Constitutional Democratic Party, vowed to block the bill. But the large majority that the LDP–Komeito ruling coalition enjoys in both houses of the Diet, along with support from the conservative Japan Innovation Party, cleared the way for the bill’s passage.
Even though Kishida won the legislative battle, whether the public will support it remains highly questionable.
In fairness, the majority of the Japanese public supported a defence spending increase. Polls taken by media outlets across the ideological spectrum throughout 2022 consistently showed that the public mostly supported a defence spending increase. Three separate media polls taken in April, October and December 2022 show that over half of the respondents supported a defence spending increase. Even a May 2022 poll by the Mainichi Shimbun, known for its criticism of expansive defence policy, shows 76% public support for such an increase.
But the public resisted funding this defence spending increase through higher taxes. Public resistance to tax increases began showing in late 2022. Two polls in November and December showed that more than 60% of the public disapproved of such a tax hike. This public pushback continues in 2023. Polls in January and February showed that 71% and 64% of respondents were against increasing taxes to fund a defence budget increase.
A 7 May public opinion poll revealed that nearly 90% of the respondents are concerned about a military crisis in Taiwan and more than 60% support Japan acquiring counterstrike capabilities. But 80% are opposed to financing defence spending through tax increases.
Plus, Kishida might have missed the chance to gain public support for the defence tax hike by bringing the case to the public. Two separate polls conducted in January indicated that 78% and 63% of respondents thought that Kishida should dissolve the lower house and call an election before implementing the defence tax hike. But with his approval rating just recovering to 45% following a successful G7 summit in Hiroshima, Kishida decided not to dissolve the lower house at least in the near future.
The Japanese public seem already to be reacting negatively to Kishida’s choice. The 17–18 June poll conducted by Kyodo News shows that Kishida’s approval rating has dropped by more than 6 points to 40.8%. While the defence-related tax hike wasn’t the only reason for the decline in his approval rating, it indicates that Kishida’s tactics of steamrolling widespread public resistance with the power of majority might work in the short term, but may undermine the sustainability of Japan’s increased defence spending over time.