The politics of Japan's defense spending

Last week, Prime Minister Fumio Kishida announced that the Japanese government will double its defense spending within the next five years.

By doing so, he did something that no Japanese leader has done since the mid-70s: He shattered the self-imposed 1% of gross domestic product ceiling for the nation’s defense budget.

Since 1976 — when Tokyo imposed the ceiling — the issue of Japanese defense spending has always been a matter of politics first, practical realities second. Any attempt to breach the 1% of GDP threshold was taboo, no matter what the practical justification may have been.

Shinzo Abe could not do it when he was prime minister despite his fervent desire to advance his security agenda, and when Yasuhiro Nakasone tried in the late 80s, members of his own party threatened to join a no-confidence vote against him.

But why did the Liberal Democratic Party-led government impose that threshold and why has it held firm for so long? The answers to those questions help us understand the path ahead.

After several political scandals rocked the LDP in the 70s — not least of which was the “Lockheed Incident” that forced Prime Minister Kakuei Tanaka out of office — the party pushed for mild-mannered Takeo Miki to become the head of government.

Labeled " Clean Miki," his role was to rebuild the Japanese public's confidence in the LDP. His original objective for accomplishing that was government reform, but he achieved minimal success in that area, evidenced in part by the fact that ousted Prime Minister Tanaka continued to serve in parliament and still wielded significant political influence despite his criminal-level misconduct.

Unable to overcome internal political obstacles, Miki did what he could to respond to public sentiments. So when domestic criticism emerged over Japan’s defense spending, he announced a self-imposed budgetary cap of 1% of the country’s GDP. There was no practical logic or brilliant calculus behind that particular number other than it was around what was already being spent and it read well for external audiences.

Despite the arbitrariness of the figure, once announced it stuck. While many will point to “pacifism” as the reason it has endured, there are three political factors that came into play.

First, the LDP is far from monolithic. Although its members are all obliged to avoid airing dirty laundry in public, the hundreds of sitting lawmakers and network of over a million party members across the country introduces different ideas and interests, and, more importantly, create checks and balances within the confines of the LDP. If the prime minister (who also serves as the party president) begins to stray too far from those ideas and interests, party members begin to rebel and challenge the incumbent leader. When circumstances are contentious enough, those internal fights start to spill out into the information space.

The second is that not all of the LDP's parliamentarians want to increase the defense budget. Further, there is no consensus among those who do on how it should be done. Some agree in principle but argue over how to actualize the policy decisions. Others outright disagree with increasing the defense budget because it robs from other policy initiatives and economic programs. Then there are groups who will be singularly focused on how such a move affects public support for the administration and the party.

Finally, the LDP has its junior coalition partner that it must consider. Komeito maintains a pacifist platform, has an interest in how the government's budget is spent and wields a modicum of veto power when it comes to policy making. Komeito has had an interest in keeping the 1% threshold and it is invested in how the LDP-led government proceeds with its defense reforms.

While all those factors contributed to the 1% ceiling from being broken for nearly 50 years, that changed this past week.

Kishida called for the resourcing of about another ¥4 trillion to double Japan’s defense spending to 2% of its GDP by fiscal year 2027. Of that ¥4 trillion, his government will be looking to cover about a quarter of that via tax hikes.

But this is only the first step — and already those three factors are starting to influence the present situation.

Although some are celebrating this development, Kishida’s announcement has fueled tensions within the LDP. Several prominent legislators have taken to social media with their complaints about the prime minister’s decision, not least of which have been Economic Security Minister Sanae Takaichi and defense-minded Masahisa Sato.

Sato matter-of-factly stated that it was "out of order to raise the issue of taxes before explaining the content of the defense capabilities." Takaichi, who has already said she intends to succeed Kishida as prime minister, was less reserved in her criticism when she tweeted that she "can't understand the true intention of the prime minister."

This dissent is spilling out into the media as all major news outlets have reported on voices of concern within the LDP over Kishida’s proposal. Kishida is already facing splintering support within his party, and the fact that opposition is so vocal on this matter reflects his weakened position atop the party. Although there is no coming back from this decision, any potential challengers will seek to exploit it for their own political gains.

Meanwhile, the Kishida administration has worked to keep the junior coalition partner in the decision-making process. Through a separate set of consultations, the LDP and Komeito reviewed the content of three core policy documents related to Japanese security. Among them is the forthcoming Mid-Term Defense Program, which will lay out the country's five-year defense acquisition plan and explain in part how the government intends to spend all its newfound budgetary allocations. Komeito formally accepted the document on Monday this week, but there is still no word on its position vis-a-vis the administration’s intent for funding the designs it prescribes. Thus, negotiations with Komeito on how to actualize this defense spending are still yet to come.

Fortunately for Kishida, the December polling numbers released this week have leveled off. This will relieve some of the pressure he will have on implementing these security designs. He and his supporters inside the LDP will have to corral the dissenters and gain consensus on the proposed way ahead without fracturing the party even further. However, if Kishida’s failed attempts at implementing anything related to "new capitalism" tell us anything, it is that the LDP has been effective at blocking his proposals related to economic policies. All the while, there are many questions that are yet unanswered.

How will this affect Japan’s economy as it is still rebounding from the pandemic? What happens to public support when the administration has to impose a tax hike to fill the financial gap? What if Komeito decides to challenge the LDP's proposals?

These questions illustrate that although the decision has been announced, the issue is far from settled. There are still practical questions that must be answered, but it will be the political challenges that present a minefield for implementation that the Kishida administration must now traverse. For observers of Japanese politics and security, it is necessary to understand what those challenges are and how they will affect this decision because there are miles of treacherous terrain to go before this policy becomes a reality.

Michael MacArthur Bosack is the special adviser for government relations at the Yokosuka Council on Asia-Pacific Studies. He previously served in the Japanese government as a Mansfield fellow.