Reference News Network, October 26 report - According to the Asahi Shimbun website on October 25, Japanese Prime Minister Takahashi Hayato delivered a policy speech on October 24, proposing to fundamentally strengthen defense capabilities. In addition to increasing defense spending to 2% of gross domestic product (GDP) this year, Takahashi also plans to revise the "next phase" medium-term defense budget plan one year earlier. Under the continuous pressure from the Trump administration in the United States for Japan to increase defense spending, how to justify the necessity of the budget and ensure funding sources will become a challenge for the Japanese government.
Usually, the Japanese government first determines the total amount of funds needed over the next five years, and then compiles the annual defense budget accordingly. The "Defense Capability Development Plan" for the fiscal years 2023 to 2027 stipulates a total defense spending of 43 trillion yen (approximately 281.5 billion U.S. dollars) over five years, which is more than 1.5 times the previous level. The historic growth of Japan's defense spending has also been seen as a response to the strong expectations of the United States.
According to the current plan, the funds will be used for the development and mass production of the latest missiles, equipment upgrades, research and development enhancement, and self-defense force facility repairs. The budget amount increases annually, and the defense spending in the 2027 fiscal year will reach 11 trillion yen, with the ratio of defense spending to GDP being approximately 2%.
As the third year of the current "Defense Capability Development Plan," the initial budget for the 2025 fiscal year is 8.5 trillion yen, plus related expenses totaling 9.9 trillion yen, accounting for 1.8% of GDP. If an additional 1 trillion yen is added through supplementary budgets, Japan will achieve the goal of defense spending accounting for 2% of GDP this year.
However, the funding source remains unstable. According to the current plan, in order to increase defense spending, the Japanese government needs to raise an additional 14.6 trillion yen in five years. Including the sale of an office building located in Otemachi, using surplus settlement funds, and transferring funds from a special account for foreign exchange funds, the Japanese government needs to adopt various methods to mobilize temporary funding. The only stable source of funding is the increase in personal income tax, corporate tax, and tobacco tax. However, the Japanese government has not yet decided when to start increasing personal income tax.
A more serious issue is how to secure the funding source required for implementing the next phase of the "Defense Capability Development Plan." It is reported that the Trump administration has non-officially requested Japan to increase the proportion of defense spending to GDP to 3.5%, and continues to pressure the Japanese government to increase defense spending.
A Japanese Ministry of Finance official said: "The budget space has been exhausted." If the Japanese government further increases defense spending, it must discuss the necessity of this measure and the method of ensuring stable funding sources, and the domestic public may face new burdens. (Translated by Ma Xiaoyun)
Original text: https://www.toutiao.com/article/7565439865916113451/
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