Prime Minister Fumio Kishida has instructed government ministries and agencies to consider a new framework under which budgets related to public infrastructure and research projects would be counted in the nation's defense-related expenditures.
An advisory panel discussing issues including what equipment the Self-Defense Forces should possess, the size of defense-related budgets and how they will be financed held its second meeting at the Prime Minister's Office on Thursday.
At the meeting, Kishida said research and development projects and the construction and use of public infrastructure would be "greatly" pushed forward. "It's vital that related budgets are well used, based on the needs of the Defense Ministry and the Japan Coast Guard," Kishida stressed.
Japan Science and Technology Agency President Kazuhito Hashimoto and Takahiro Ueyama, a member of the Council for Science, Technology and Innovation (CSTI), proposed establishing research hubs outside universities in a bid to expand scientific and technological research in defense fields.
The National Security Council presented a plan to create a framework under which it would exchange opinions with the CSTI, which sets the direction for distributing science and technology budgets, to channel some of these funds to defense-related purposes.
Member nations of the North Atlantic Treaty Organization aim to spend 2% or more of their gross domestic product on defense. The government also is aiming to increase Japan's defense-related expenditures to the same level.
Japan's defense spending in the overall budget for fiscal 2021, including supplementary budgets, came to about 1.24% of GDP under the NATO standard of accounting, which includes expenditures on the coast guard and other outlays. Budgets for public works projects and science and technology projects outside the jurisdiction of the Defense Ministry were not counted as part of Japan's defense spending.
The government expects to include in defense-related expenditures costs such as those incurred in the construction of port facilities where SDF vessels dock in the Nansei Islands and other public works projects.
The issue of financing these outlays was discussed at Thursday's meeting. Several panel members stated the government would have to gain the understanding of the public if tax hikes were needed to fund greater defense spending. Increasing the corporate tax rate "could pour cold water on economic growth," another member said.
Kishida instructed Finance Minister Shunichi Suzuki to report on the status of options being considered for securing the financial resources for defense spending at the panel's next meeting.
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