TOKYO – New Prime Minister Sanae Takaichi plans to move up Japan’s target for increasing defense spending to 2 percent of gross domestic product from fiscal 2027 to fiscal 2025, beginning the necessary steps within the current fiscal year by tapping a supplementary budget, government sources said Wednesday.
The first policy speech in parliament by the hawkish Takaichi on Friday is expected to highlight her intention to fundamentally strengthen defense capabilities amid a changing security landscape, paving the way for more defense spending.
Takaichi also plans to say her government will revise three key overarching documents on defense and security by the end of next year, while making her case for a “responsible” fiscal policy, as she has vowed to ramp up investment in strategic areas.
To boost defense-related outlays to 2 percent of GDP, Takaichi plans to say that her government will use a yet-to-be-compiled supplementary budget for fiscal 2025 through next March, according to the sources.
Japan has only limited fiscal space, given its debt is already more than twice the size of the economy.
Still, growing threats posed by an assertive China and North Korea’s nuclear and missile development have led Japan to enhance the interoperability of the Self-Defense Forces and the U.S. military while pledging to substantially increase defense spending.
The 2 percent target was set in 2022, when Japan previously updated its three overarching documents — the national security strategy, the national defense strategy and the defense build-up program.
Takaichi’s speech is expected to be parsed for any hints of how her government will look, after her stances on history and security raised concerns at home and abroad about the country’s tilt to the right, while her preference for fiscal spending buoyed financial markets.
On China, Takaichi will acknowledge challenges remain, saying, “We will continue summit-level dialogue in a candid manner and pursue a strategic and mutually beneficial relationship in a comprehensive manner,” according to the sources.
Prioritizing measures to address the continued rise in living costs, Takaichi will pledge to raise incomes, improve consumer sentiment and boost tax revenue. She also plans to promote major investment in regional areas as part of her effort to revitalize local economies, the sources said.
The 64-year-old leader of the ruling Liberal Democratic Party will maintain the party’s push for the use of nuclear power and renewable energy, partly to achieve carbon neutrality.
Takaichi has gotten off to a rough start since being elected LDP president in the party’s leadership race in early October. The longtime coalition partner, the Komeito party, pulled out, forcing her to seek a new ally — the center-right Japan Innovation Party — to secure her path to the premiership.
In a nod to her new coalition partner, which has a strong base in Osaka, western Japan, Takaichi is expected to say the government will accelerate discussions on how to divide responsibilities and functions if a JIP proposal to create a “second capital” is to be realized.
The plan, floated by the party known in Japanese as Nippon Ishin, would establish a second capital to serve as a backup to Tokyo — where administrative functions and the population are heavily concentrated — in times of emergency.
AloJapan.com