Kishida Fumio

Press Statement on National Defense Strategy & Defense Buildup Plan

delivered 16 December 2022

  Today, the Cabinet approved three documents: the new National Security Strategy, the National Defense Strategy, and the Defense Force Development Plan.

I have long said that the world is at a historical crossroads. Over the past 30 years, the world has become increasingly globalized, integrated, and coordinated. However, in recent years, due to changes in the balance of power in the international community, conflicts between countries and competition for national interests have become more pronounced, and the division within globalization has intensified. The international community has entered an era in which cooperation and division, cooperation and confrontation are intricately intertwined.

The most violent manifestation of this division was Russia's aggression against Ukraine, and unfortunately, in the countries and regions surrounding our country, such moves as the strengthening of nuclear and missile capabilities, rapid military buildup, and attempts to unilaterally change the status quo through force have become even more pronounced.

Looking back over the past year, a ballistic missile passed over our country for the first time in five years. Some ballistic missiles landed in our EEZ [Exclusive Economic Zone]. There are also signs of preparations for a nuclear test. The boundaries between contingency and peacetime, military and non-military, have become blurred, and the scope of security has expanded to include not only traditional diplomacy and defense, but also economics and technology.

With this determination, I have held 18 meetings of the National Security Council [NSC] since the end of last year, and have provided answers to various security issues, including the formulation of a new national security strategy and the drastic reinforcement of defense capabilities. We have been able to provide answers to various issues.

A 43 trillion yen defense force development plan will be implemented in order to fundamentally strengthen defense capabilities on an urgent basis over the next five years. In FY2027, the budget for both the drastically strengthened defense force and its complementary efforts will total 2% of GDP [Gross Domestic Product]. Stable financial resources will be secured for this purpose. In the process of reaching this conclusion, we received a variety of opinions through hearings at the National Security Bureau and other organizations, as well as through expert meetings. We also received frank and energetic discussions in the working team of the ruling parties, both public and private. We have also received proposals from the Japan Restoration Association and the Democratic Party of Japan. I would like to express my gratitude for the sincere cooperation of all of you who wish for the peace and security of Japan and the international community.

Of course, in order to protect the lives, livelihoods, and businesses of our people, our first priority is to make diplomatic efforts to create a desirable international environment and security environment for our country. We will continue to further strengthen our proactive diplomacy, which is based on the Japan-U.S. alliance and promotes multilateral cooperation, while emphasizing universal values such as freedom, democracy, human rights, and the rule of law. At the same time, diplomacy requires defense capabilities to back it up, and strengthening defense capabilities will also lead to persuasive power in diplomacy.

On this basis, when considering the strengthening of our defense capability this time around, we will assume various situations and ask ourselves whether the current capabilities of the Self-Defense Forces can deter threats to our country, taking into account the capabilities of our opponents and their new ways of fighting. When the threat becomes a reality, will we be able to defend this country? We have conducted an extremely realistic simulation. Frankly speaking, the current situation is not sufficient. I would like to give three specific examples of what new capabilities are needed.

The first is the possession of a counterattack capability. The importance of the missile defense system that has been established to date remains unchanged. However, missile technology is rapidly evolving, including hypersonic glide weapons and missiles that fly on irregular trajectories. There is also the possibility of saturation attacks in which a large number of missiles are launched at once. In such a severe environment, the ability to counterattack as a deterrent to dissuade an opponent from attacking will become indispensable in the future.

The second is to respond to new domains such as space, cyber, and electromagnetic waves. In the severe security environment where the boundaries between military and non-military, peacetime and contingency have become blurred, hybrid warfare has developed, and gray zone situations are constantly occurring, Japan will strengthen its capabilities, both in quantity and quality, in new areas such as space, cyber, and electromagnetic waves.

Third, we will strengthen the defense system in the southwest region. In line with changes in the security environment, we will double the number of core Ground SDF [Security Defense Forces] units in the southwestern region, as well as increase the number of transport aircraft and transport ships for rapid deployment of troops from all over Japan. This is also important from the perspective of protecting the Japanese people in the event of a contingency. In addition, the Japan Coast Guard will increase its capacity to protect the Senkaku Islands, and the Minister of Defense will strengthen cooperation with the Self-Defense Forces, including the Coast Guard's control procedures.

Starting with these initiatives, we will implement a defense force development plan worth about 43 trillion yen over the next five years, including enhancement of ammunition and other supplies, securing sufficient maintenance funds, and improving compensation for members of the SDF. Steady implementation of the plan will improve the deterrence and response capabilities of the SDF, thereby reducing the likelihood of armed attack itself.

In addition, we will utilize not only our defense capabilities but also our comprehensive national power to seamlessly protect our nation in all directions. To this end, we will take immediate steps across government to strengthen the capabilities of the Japan Coast Guard and promote economic security policies. And, based on these efforts as well, we will strengthen our comprehensive defense system by working on research and development and public infrastructure development as a complement to the drastic reinforcement of our defense capability.

We will take budgetary measures so that the total amount of defense expenditures will reach 2% of the current GDP in FY2027 [Fiscal Year 2027], including the above-mentioned drastic reinforcement of defense capabilities and complementary measures.

NATO [North Atlantic Treaty Organization] and other nations have shown their willingness to spend commensurate with their economic strength on defense in order to maintain the security environment, and we will accelerate our efforts toward FY2027 in cooperation with these allies and like-minded nations.

The defense capability to be strengthened over the next five years must be maintained and enhanced in the future, even after FY2027. To this end, a stable financial resource of approximately 4 trillion yen per year is indispensable. For this reason, since the Ordinary Diet session this past spring, I have consistently stated that the content, budget, and financial resources for strengthening defense capabilities will be decided in an integrated manner at the end of this year and presented to the public in a clear manner.

In order to secure stable financial resources, we have strictly requested the Minister of Finance to make every possible effort to reduce expenditures, utilize surpluses and non-tax revenues, etc. As a result, we have been able to secure the necessary financial resources for approximately 40% of the budget. As a result, we are now on a path to cover about three-quarters of the necessary financial resources through spending reforms and other efforts. There were various discussions about the remaining one-quarter, or a little more than 1 trillion yen.

As the Prime Minister, I believed that we should drastically strengthen our defense capability to protect the lives, livelihoods, and businesses of our citizens, and that the stable financial resources to back this up should not be deferred to future generations, but should be handled by those of us living in the present as our responsibility to future generations. In addition, to fundamentally strengthen our defense capability means, simply put, to purchase fighter jets and missiles. We have repeatedly asked ourselves whether it is really a good idea to finance these purchases with debt, and we have decided that we should secure stable financial resources.

Under the policy of deciding on the tax reforms in an integrated manner, the ruling parties have been engaged in intensive discussions, and today they have decided on the Tax Reform Proposal. With regard to corporate tax, we are requesting a new additional tax rate of 4 to 4.5 percent on the amount of corporate tax. This translates into a corporate tax rate of about 1 percent. In addition, in doing so, we have greatly strengthened our consideration for small and medium-sized enterprises, and have established a deduction of approximately 24 million yen in terms of income. As a result, less than 6% of all corporations are subject to this measure.

With regard to income tax, taking into account the current situation of households, where wage increases have not kept pace with rising prices, the income tax burden has been prevented from increasing. Specifically, first of all, we will lower the special income tax for reconstruction, which currently asks for 2.1 percent of income tax, by 1 percent, and extend the taxation period to ensure that the total amount of reconstruction funds is secured. We will continue to take responsibility to ensure that we can support long-lasting efforts such as the decommissioning of nuclear reactors and the establishment of the Fukushima International Research and Education Organization. On top of that, we will ask for a new additional tax with a tax rate of 1 percent, which corresponds to the amount of the reduction.

Furthermore, we will raise the cigarette tax by the equivalent of 3 yen per cigarette in stages. As we have said in the past, these measures will not be implemented starting next year.

The timing of implementation will be phased in over a period of several years toward FY9, taking into account the current economic situation, etc. Details such as the starting date will be further discussed by the ruling party and decided next year. Some people have suggested that if this is the case, we do not need to make a decision this year. However, if it is clear that the public will have to bear a burden in the future and we do not present it to them this year, we will not have fulfilled our accountability. We would like to present the information in good faith and in an honest manner. We have made this decision. We will continue to make every effort to carefully explain to the public the purpose and details of this measure. We ask for your cooperation in protecting our present peaceful and prosperous lives and in fulfilling our responsibility to future generations and to future Japan.

With the Peace and Security Legislation enacted by the Abe Administration,¹ we already have a system in place legally and theoretically to respond to any contingency without interruption. Indeed, these three documents and the security policy based on them represent a major shift in postwar security policy. Needless to say, these measures are within the scope of the Constitution of Japan, international law, and domestic law. Japan's adherence to the three non-nuclear principles and the exclusive defense of the nation, as well as Japan's progress as a peaceful nation, will remain unchanged. We will not only transparently explain these points to the public, but will also continue our efforts to explain them well to the countries concerned and have them understand them.

I have explained above how we will strengthen our defense capabilities to protect Japan, but we cannot achieve this without the cooperation and understanding of the people of Japan. The importance of each and every one of us having the awareness of proactively defending our country is well demonstrated by the tenacity of Ukraine. At this major turning point in the security policy of our country, I once again ask for the cooperation of our people in order for us to fulfill our responsibility to future generations.

Thank you very much.

Page Updated: 12/22/22

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