Today: Saturday, 18 May 2024 year

Japan passed a law on financing the growth of military spending.

Japan passed a law on financing the growth of military spending.

Japan’s upper house of parliament passed a law on sources of funding for increased defense spending, the vote was broadcast live from the meeting room.

The law was passed despite the resistance of the opposition due to the fact that the ruling party has a majority of votes in the upper house.

The law will provide non-tax sources to ensure the increase in military spending. The Japanese government intends to increase the amount of military spending to 43 trillion yen ($318 billion) over five years from 2023 to 2027, which is 17 trillion (about $126 billion) more than the current level. To ensure non-tax revenues, a “Defence Strengthening Fund” will be created. Part of the increased spending is planned to be repaid by increasing corporate taxes, but due to the fact that this measure is extremely unpopular even within the ruling party, it was decided to postpone its implementation for a year from 2024 to 2025.

The Defense Strengthening Fund, in particular, will have to deal with the distribution of non-tax funds in the amount of 4.59 trillion yen ($ 34 billion) for defense needs in the long term, included in the budget for the current year. In mid-December last year, Japan adopted three key documents on defense and security: the “National Security Strategy”, which defines the main directions of foreign policy in the field of defense, the “National Defense Strategy”, indicating the goals and means of defense, the “Defense Plan” – it determines the overall defense spending and the scale of armaments.

Three documents outlined an increase in Japan’s defense spending to the level of 2% of GDP by 2027. This is approximately 11 trillion yen ($81 billion). Military spending in fiscal year 2022 (ended March 31, 2023) was 5.4 trillion yen ($40 billion), roughly 1.24% of GDP. In the current fiscal year, defense spending stands at a record 6.79 trillion ($52 billion), up 1.4 trillion yen ($10.4 billion) from fiscal 2022. In addition, long-term revenues to the Defense Strengthening Fund are a separate item – 4.59 trillion yen (34 billion dollars).

The “National Security Strategy” and “National Defense Strategy” spell out the possession of “retaliatory strike capabilities”, which implies the defeat of enemy bases. So far, these possibilities have been implied in Japan’s right to self-defense, but not spelled out. This change is a significant turn in Japan’s defense policy.