Many policymakers within the government and the ruling Liberal Democratic Party are clamoring for delaying the decision on how to finance the proposed expansion of defense spending.

Deficit financing of Prime Minister Fumio Kishida’s plan to beef up Japan’s defense capabilities would add to a list of serious problems with the proposal.

Other concerns include the risk of undermining the nation’s long-established principle of a strictly defensive security policy and a lack of serious efforts to convince the people of the need for sharp military expansion.

There must be meaningful debate on how to secure revenue sources to pay for the cost.

Kishida has repeatedly promised to make all key policy decisions about his plan for “fundamental enhancement” of Japan’s defense capabilities at the same time. He has said he would make the decisions concerning the new capabilities to be acquired, the scale of spending growth and financing plans as a package.

Last week, however, he instructed that security-related expenditures should grow to an equivalent of 2 percent of the nation’s gross domestic product in fiscal 2027.

On Dec. 5, Kishida told the defense and finance ministers to increase defense spending sharply to a total of 43 trillion yen ($314.41 billion) for the next five years. These moves suggest that the prime minister is acting on a decision about the scale of spending expansion he has already made.

As for the revenue sources to finance the annual increase in the defense budget of about 5 trillion yen, Kishida on Dec. 5 said he will make the decision as part of the package to be announced at the end of the year.

But a legion of LDP lawmakers are voicing loud opposition to tax increases and calling for debt financing of the outlays. Speaking in a Dec. 4 TV program, Deputy Chief Cabinet Secretary Seiji Kihara just said the government intends to show the public a kind of rough sketch of the financing plan by the end of the year.

The Kishida administration has yet to offer any clear idea about how to fund the defense buildup. There are serious concerns that the administration may forge ahead with the initiative to ramp up defense spending without mapping out a basic strategy for securing necessary revenue sources.

The Finance Law, which was enacted immediately after the end of World War II, prohibited the government from issuing deficit-financing bonds because of the lessons the nation learned from how reckless the military buildup dragged the nation into the devastating war.

As the LDP and its junior coalition partner, Komeito, have agreed to enable the nation to acquire the ability to strike targets in enemy territory, the government is seeking to reduce the restrictions on the types of weapons Japan can possess.

If, in addition, the government is allowed to ignore the fiscal restraint on the defense budget by using bonds to finance the expansion, it could get a free hand to boost defense spending at will.

If huge new financing sources are needed, the government should start by eliminating all wasteful expenditures. But it would be unrealistic to try to secure trillions of yen of funds for new expenditures only through fiscal reforms featuring spending cuts. It is obvious that debate must start on a tax hike.

To be sure, it would be difficult to implement a tax increase immediately. But the administration needs to decide at least on an outline of future tax expansion showing a time frame and the specific taxes that will be raised.

Otherwise, the initiative to increase defense outlays will leave serious problems for the future. There have been many bad examples of spending increases without securing viable revenue sources, including one that led to an increase in the share of tax financing for pension payouts.

But a tax increase is a tough political challenge that cannot be overcome without broad public support. The administration cannot hope to win this support for an increase in the tax burden to enhance the nation’s defense capabilities unless there is solid national consensus on the initiative.

The administration is making a fundamental mistake by pursuing a predetermined target for defense spending growth.

The administration must not be allowed to make any rash decision on such a radical change of the nation’s postwar security policy.

It should come up with a more realistic plan for boosting the nation’s security based on the principle of a strictly defensive national defense, which is the core creed underlying Japan’s identity as a pacifist nation.

The Asahi Shimbun, Dec. 6

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EDITORIAL: Viable revenue sources needed if defense spending to be boosted

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06.12.2022

Many policymakers within the government and the ruling Liberal Democratic Party are clamoring for delaying the decision on how to finance the proposed expansion of defense spending.

Deficit financing of Prime Minister Fumio Kishida’s plan to beef up Japan’s defense capabilities would add to a list of serious problems with the proposal.

Other concerns include the risk of undermining the nation’s long-established principle of a strictly defensive security policy and a lack of serious efforts to convince the people of the need for sharp military expansion.

There must be meaningful debate on how to secure revenue sources to pay for the cost.

Kishida has repeatedly promised to make all key policy decisions about his plan for “fundamental enhancement” of Japan’s defense capabilities at the same time. He has said he would make the decisions concerning the new capabilities to be acquired, the scale of spending growth and financing plans as a package.

Last week, however, he instructed that security-related expenditures should grow to an equivalent of 2 percent of the nation’s gross domestic product in fiscal........

© The Asahi Shimbun


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