Japan cabinet approves record budget with $52B for defence

Japanese Prime Minister Yoshihide Suga's government has approved a ninth consecutive rise in military spending, funding the development of an advanced stealth fighter and longer-range anti-ship missile to counter China's growing military power and an unpredictable North Korea.

Japan’s cabinet approved the record budget proposal on Monday for the next fiscal year from April, including a stimulus for the pandemic-hit economy. 

The budget proposal totals $1.03 trillion (106.6 trillion yen), a 3.8 percent rise from the current year and the ninth straight annual increase.

The defence ministry will get a record $51.7 billion (5.34 trillion yen) for the year starting in April, up 1.1 percent from this year. With Suga's large majority in parliament, enactment of the budget is all but certain.

Suga is continuing the controversial military expansion pursued by his predecessor, Shinzo Abe, to give Japan's forces new planes, missiles and aircraft carriers with greater range and potency against potential foes including neighbouring China.

China plans to raise its military spending 6.6 percent this year, the smallest increase in three decades

Strengthen national defence

"We will strengthen the capacity necessary for national defence... in order to keep pace with the security environment which is becoming increasingly tough," Chief Cabinet Secretary Katsunobu Kato told a regular briefing.

A planned jet fighter, the first in three decades, is expected to cost around $40 billion and be ready in the 2030s. That project, which will be led by Mitsubishi Heavy Industries Ltd with help from Lockheed Martin Corp, gets $706 million in the new budget.

Japan will spend $323 million to begin development of a long-range anti-ship missile to defend its southwestern Okinawan island chain.

Other big purchases include $628 million for six Lockheed F-35 stealth fighters, including two short-takeoff and vertical-landing (STOVL) B variants that will operate off a converted helicopter carrier.

The military will also get $912 million to build two compact warships that can operate with fewer sailors than conventional destroyers, easing pressure on a navy struggling to find recruits in an ageing population.

Japan also wants two new warships to carry powerful new Aegis air and ballistic missile defence radars that have much as three times the range of older models. The government has not yet estimated the cost of the plan, which replaces a project cancelled in June to construct two ground Aegis Ashore stations. 

Social welfare and Covid-19

The overall budget reflects the long shadow cast by the coronavirus pandemic and the growing cost of supporting the country's ageing population, with social welfare and pension programmes estimated to cost $358 billion.

Prime Minister Yoshihide Suga's cabinet also wants to set aside a $53 billion reserve, likely to be used for further virus measures.

Japan is bracing for falling tax revenues as the coronavirus pressures business activity, and the government will turn to debt to cover about 40 percent of the budget.

The proposal will now go to parliament for its approval, expected sometime in spring next year.

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