Defense Equipment Fund Unused

The government of Japan is going to increase defense budget to the level of 2 percent of gross domestic product, with a goal of accumulating 43 trillion yen between FY 2023 and FY 2027. However, it is questionable whether the government can spend all the budget. In the discussion of the Diet, an opposition lawmaker revealed that some of the fund for Ministry of Defense has been left behind mostly unused.

The government has been accumulating “defense equipment transfer smoothening fund” every year. It appropriated 80 billion yen for the fund in FY 2023 and FY 2024. But the government has decided only 1.6 billion yen of spending from the fund. Nevertheless, the government requested an additional 40 billion yen for FY 2025. A doubt about necessity of the fund was raised in the Diet discussion.

 

A lawmaker with Constitutional Democratic Party of Japan (CDPJ), Takao Fujioka, asked why the spending of the fund was so delayed in the Committee for Budget in the House of Representatives. “A certain amount of balance is needed for emergency,” answered Minister of Defense, Gen Nakatani. Nakatani also said that he would consider revising the verification system to check how the fund is spent.

 

Fujioka demanded the government to cut 40 billion yen for the fund and use it for supporting medical treatment. The government has a plan to cut the subsidy for a system to support patients who receive advanced but expensive treatment. Against a minority government led by leading Liberal Democratic Party and Komeito, the CDPJ demands reorganization of FY 2025 budget bill.

 

Defense equipment transfer smoothening fund is handled by a governmental organization, which board members are mostly retired officers from Ministry of Defense or Japan Self-defense Force. Fujioka questioned why so many retired personnel are hired by the organization. Prime Minister Shigeru Ishiba promised to explain the reason why.

 

The fund was established in 2022, when former Fumio Kishida administration renewed Defense Buildup Program, which determined the level of equipment for Japan to possess. It was one of the elements of Japan’s enhancement of defense capability with leadership of Kishida to meet the demand of the United States.

 

Nakatani explained that the fund was spent for purchasing antenna for communication system of vessels for Indian Navy in FY 2024. There was no spending in FY 2023. Nakatani expects the fund to be spent for ten projects in FY 2025, including joint development of brand-new vessel for Australian Navy.

 

The delay of consuming defense budget indicates that Japan does not know what it should do to build up its defense capability to deal with advance of China in Asia-Pacific region or missile and nuclear development of North Korea. As seen in excessive accumulation of reserve in annual budget at the time of explosive infection of COVID-19, the government of Japan often requires approval for discretional use of funds in national budget.

 

 

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