By HIROBUMI OHINATA/ Staff Writer
May 7, 2024 at 14:30 JST
Prime Minister Fumio Kishida inspects Ground Self-Defense Force troops at Camp Asaka in 2021. (Pool)
The government plans to issue construction bonds worth 511.7 billion yen ($3.29 billion) in fiscal 2024, up 20 percent from the previous year, to finance the nation's mammoth defense buildup, sources said.
The Kishida administration decided in December 2022 to boost the nation’s defense budget for five years through fiscal 2027 to 43 trillion yen, up 50 percent from previous levels.
The successive postwar governments had refrained from tapping bonds for defense purposes because war bonds were used to finance Japan’s military operations before World War II.
In a historic shift, the Kishida administration authorized construction bonds, which were used for public works projects, for building Self-Defense Forces barracks and vessels, for example.
The amount of construction bonds for defense purposes in fiscal 2024 represents an increase of 77.4 billion yen from the 434.3 billion yen included in the initial budget for fiscal 2023.
“As Japan is reinforcing its defense capabilities in stages, the expenditures for construction of facilities and vessels to be covered by government bonds have increased,” a Finance Ministry official said.
Total defense spending in the initial budget for fiscal 2024 will come to about 7.95 trillion yen, up about 1.13 trillion yen from the previous year.
Pressures are expected to mount on the government to borrow more for defense buildup.
The government has said it plans to raise taxes to cover increased defense spending but has been unable to decide on specific tax hikes.
It also expects sales of national assets and surpluses at special accounts to finance defense outlays, but these are far from reliable revenue sources.
Some within the ruling Liberal Democratic Party and the defense industry are calling for even more defense spending, citing the yen’s depreciation and rising equipment and materials costs.
Kenji Ishikawa, a professor of constitutional law at the University of Tokyo, said the Kishida administration has crossed the line by earmarking proceeds from construction bonds for defense purposes.
“If we look back on history, countries that were able to easily raise funds for war have engaged in warfare,” Ishikawa said.
“A provision for never maintaining the potential for war was included in the Constitution to ensure Japan’s renunciation of a war of aggression in terms of fiscal policy,” he said. “To reflect that spirit, the Public Finance Law prohibits debts for purposes other than investments such as public works projects.”
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