Photo/Illutration The Defense Ministry’s building in Tokyo’s Shinjuku Ward (Asahi Shimbun file photo)

About 130 billion yen ($804 million) of the defense budget for fiscal 2023 will be unused, despite the government’s insistence that spending for national security must increase through tax hikes.

Chief Cabinet Secretary Yoshimasa Hayashi revealed the expected unspent portion of the 6.82 trillion yen appropriated for defense at a news conference on July 10.

He cited lower-than-expected contract amounts and decreasing personnel costs as factors.

The excess amount is the second largest ever for a defense spending, following the total in fiscal 2011, after the Great East Japan Earthquake and tsunami devastated northeastern coastal areas.

Hayashi said he was informed that “the percentage of unexpended funds is not as high as in previous years.”

But a Finance Ministry official said, “The budget was increased too quickly, and adjustments with contractors could not keep up.”

With the aim of drastically strengthening national security, the government decided at the end of 2022 to raise defense spending to 2 percent of GDP in fiscal 2027.

It plans to allot about 43 trillion yen for defense over five years through fiscal 2027, 1.5 times the amount over the previous five-year period.

In fiscal 2023, the initial defense budget exceeded 6 trillion yen. The government then added about 813 billion yen for defense in the supplementary budget.

Every year, about 100 billion yen of defense expenditures, or 1 to 2 percent of the budget, is unspent.

Unspent defense funds are unavoidable because contract amounts are sometimes lower than expected due to changes in project plans or foreign exchange rates.

But the government has decided to increase corporate, income and tobacco taxes to cover part of the expanded defense spending.

The excess amount raises questions on whether those tax hikes are really necessary.

Discussions on when the tax hikes should begin will be held at the year-end tax reform debate.

The ministry and the Self-Defense Forces have also been under fire for scandals over sexual harassment and fraudulent claims for allowances.

(This article was written by Tetsuya Kasai and Nobuhiko Tajima.)

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