Press Conference by Prime Minister Kishida
December 16, 2022
Today the Cabinet took a decision on three documents: a new National Security Strategy, National Defense Strategy, and Defense Buildup Program.
I have been saying for quite some time that the world is now at a historic crossroads. Over the last 30 years, globalization has progressed around the world, and global unity and cooperation also advanced. However, in recent years, because of changes in the balance of power in the international community and other factors, there are now striking confrontations between one country and another and barefaced competition between national interests, and the divisions that exist within globalization have become acute. The international community is entering an era in which coordination and division, and cooperation and confrontation, intertwine in complex ways.
Where that division has appeared most profoundly is in the outrageous act of Russian aggression against Ukraine. Unfortunately, a strengthening of nuclear and missile capabilities, rapid buildups in armaments, and attempts to unilaterally change the status quo by force have become more striking also in Japan's neighboring countries and the region around us.
Even looking back at this past year, a ballistic missile flew over Japan for the first time in five years. Some ballistic missiles also landed within Japan’s exclusive economic zone (EEZ). Moreover, there have been indications that preparations are underway for a nuclear test. In addition, the boundaries between emergencies and normal times and military and non-military are becoming blurred, while the scope of security has expanded to include not only the conventional fields of diplomacy and defense but also the economy, technology, and other areas.
Determined to decisively carry out my mission as prime minister of fully defending the Japanese nation and the Japanese people, as we approach this historic turning point, I have responded to our various security issues, including by drawing up a new National Security Strategy and fundamentally reinforcing our defense capabilities, by advancing discussions from the end of 2021 across 18 meetings of the four ministers of the National Security Council (NSC).
In order to urgently conduct a fundamental reinforcement of our defense capabilities over the next five years, we will carry out a 43 trillion-yen Defense Buildup Program. In fiscal 2027, we will secure a budget of 2 percent of GDP to cover our fundamentally reinforced defense capabilities together with other measures that complement them. We will secure stable funding sources to ensure this.
During the process of reaching this outcome, through National Security Secretariat hearings as well as eminent persons meetings, we were presented with a variety of opinions. The LDP-Komeito ruling parties working team also engaged in frank and vigorous discussions. In addition, we received recommendations from the Japan Restoration Party and the Democratic Party For the People. I wish to express my appreciation for the earnest cooperation of everyone involved, who hope for the peace and security of both Japan and the international community.
Of course, in order to fully defend the lives of the Japanese people as well as their daily lives and livelihoods, what we must prioritize first and foremost is diplomatic efforts to create an international environment and a security environment that are desirable for Japan. While continuing to place emphasis on the universal values of freedom, democracy, human rights, and the rule of law, we will further enhance our active diplomacy that promotes multilateral cooperation and has the Japan-U.S. Alliance as its cornerstone. At the same time, the defense capabilities that serve as the backing to our diplomacy are absolutely essential, and reinforcing our defense capabilities also leads to persuasiveness within our diplomacy.
In light of that, when considering the reinforcement of our defense capabilities on this occasion, after making assumptions about the state of affairs of various elements and, given the capabilities of other countries and new ways to engage in combat, we ran extremely realistic simulations to determine if we would be able to deter threats against our country with our Self-Defense Forces' (SDF's) current capabilities, and if we would be able to fully defend our country if those threats were to be realized.
To be frank, our current situation is inadequate. I will offer three concrete examples of what kinds of new capabilities are necessary.
The first is to have counterstrike capabilities. The importance of the missile defense system we have built up until now remains unchanged. However, missile technology is evolving rapidly, including hypersonic glide vehicles and missiles that follow irregular trajectories. Saturation attacks involving the launch of a huge number of missiles all at once are also a possibility. In this kind of severe environment, counterstrike capabilities that serve as deterrence, discouraging other countries from attacking, are capabilities that will be indispensable in the future.
The second is responses to new domains such as space, cyberspace, and the electromagnetic spectrum. In our severe security environment, the boundaries between emergencies and normal times and military and non-military have become unclear, hybrid warfare is developing, and "gray zone" situations occur continually. In such an environment, we will reinforce our capabilities, both quantitatively and qualitatively, in new domains as well, including space, cyberspace, and the electromagnetic spectrum.
The third is a reinforcement of our defense system covering the southwest part of the country. In line with changes in the security environment, we will double the number of units forming the core of the Ground Self-Defense Force in the southwest region while also building up our transport planes and transport vessels to become able to rapidly expand units from all around Japan. This is also important from the viewpoint of protecting the Japanese people if, by some chance, an emergency were to arise. Furthermore, we will enhance the Japan Coast Guard's capacity to defend the Senkaku Islands and also advance efforts to reinforce its cooperation with the SDF, including the Defense Minister's Coast Guard control procedures.
Starting with these measures, over the next five years, we will execute the Defense Buildup Program, which is at a scale of roughly 43 trillion yen. This will include upgrading our ammunition, securing sufficient financial resources to develop and maintain our facilities and equipment, and improving the treatment SDF and Coast Guard members receive. Through steady execution of the Defense Buildup Program, we will enhance the deterrence and response capabilities of the SDF and thereby decrease the possibility of armed attack.
In addition, we will make use of our comprehensive national strength, rather than our defense capabilities alone, to seamlessly defend our nation from all angles. Towards that end, we will promptly undertake government-wide efforts that include enhancing the capacity of the Coast Guard and promoting economic security policies. And, based on these measures, we will build up our comprehensive defense system, including engaging in research and development and public infrastructure development as areas complementing the fundamental reinforcement of our defense capabilities.
We will make budgetary provisions such that this fundamental reinforcement of our defense capabilities and our efforts to complement that reinforcement, in combination, amount to 2 percent of our GDP in fiscal 2027.
In order to maintain their security environment, countries such as the members of the North Atlantic Treaty Organization (NATO) demonstrate a posture of spending a suitable amount on defense in accordance with their economic might. In light of our coordination with our allies and like-minded countries, we will accelerate our measures in the lead-up to fiscal 2027.
Our defense capabilities that we will build up over five years must then be maintained and reinforced into the future, even beyond fiscal 2027. For that reason, it is indispensable that we secure stable fiscal resources of roughly 4 trillion yen each fiscal year to back those efforts. Accordingly, since the ordinary Diet session this past spring, I have consistently stated the principle of taking a decision at the end of this year in an integrated fashion on three elements -- namely, what will be involved in the reinforcement of our defense capabilities, the associated budget, and the related fiscal resources -- and then clearly lay them out for the public.
I gave strict orders to my finance minister to make any and all possible efforts in examining first of all the use of spending cuts, surpluses, and non-tax income as stable sources of funding. The result was a course forward in which approximately three-quarters of the necessary resources can be covered through reforms to our expenditures and other efforts. There were then various discussions about the remaining roughly one-quarter, an amount of a little more than 1 trillion yen.
As prime minister, I thought that stable fiscal resources to back the fundamental reinforcement of our defense capabilities in order to defend the lives of the Japanese people, as well as their daily lives and livelihoods, are something we in the present day must address, without putting it off to future generations, as a matter of our duty towards generations still to come.
In addition, to put it plainly, fundamentally reinforcing our defense capabilities means purchasing fighter aircraft and missiles, and I have asked myself repeatedly if it is really acceptable to cover such outlays with borrowed money. I thought it is imperative for us to secure stable revenue.
This time, under the principle of taking an integrated decision, the ruling parties engaged in ardent discussions and today an outline of the ruling parties' tax reform proposal was decided upon.
In the area of corporate tax, we ask for a new surtax at a rate of 4.0 to 4.5 percent, to be levied on the amount of corporate tax paid. Converted to the corporate tax rate, this works out to approximately 1 percent. Also, when proposing this surtax, we significantly strengthened the consideration given to small- and medium-sized enterprises, creating exemptions for roughly 24 million yen of converted earnings. The result is that less than 6 percent of all corporations will be subject to this measure.
With regard to income tax, given the current family finance situation, in which wage increases are not keeping pace with rising prices, we have decided not to increase the income tax burden. In concrete terms, first, the rate of the special income tax for reconstruction, which is levied at 2.1 percent of the amount of income tax paid, will be lowered by 1 percentage point; we will also extend the period this tax will be levied. By doing so, we will be certain to secure the total amount of financial resources necessary for reconstruction from the Great East Japan Earthquake. We will continue to responsibly undertake decommissioning work, the building of the Fukushima International Research and Education Organization, and other long-term efforts in a manner that enables us to provide reliable assistance. We will then ask for a new surcharge at a rate of 1 percent, corresponding to the amount reduced.
As for the tax on tobacco, we will also gradually implement an increase equivalent to 3 yen per cigarette.
As I have been saying all along, we will not be implementing these measures beginning in 2023. Regarding the period of implementation, we will be implementing the measures in stages, over the course of several years, leading up to fiscal 2027, based on the current state of economic conditions and other factors. The ruling parties will continue to discuss the specifics about when we will launch them and other key points, and we will make a decision on these matters in 2023.
Some have expressed the view that, if that is the case, then there is no need to decide these matters within 2022. However, if I did not lay the situation out this year even though it was clear the Japanese people would need to shoulder this in the future, I would not be fulfilling my duty of accountability. I will set forth the facts frankly and with integrity. That is the decision I have made.
I will continue to do my best to carefully and conscientiously explain the objective and the content of these measures to you, the Japanese people. I ask for your cooperation in order to protect the peaceful and prosperous daily lives we currently enjoy, and in order for us to carry out our duty towards future generations and the future Japan.
Through the Legislation for Peace and Security enacted during the Abe administration, a system in which we can respond seamlessly under any circumstances is already in place both legally and theoretically, but now, through our compilation of the three new security-related documents, we are able to reinforce our security system also from the practical side.
These three documents and the security policies based on them will significantly shift our postwar security policies. It goes without saying that our responses will all be fully in accordance with the Constitution of Japan, international law, and our domestic laws. There will be no changes in the future to our upholding of the Three Non-Nuclear Principles or our exclusively defensive defense policy, nor to Japan's path as a peace-loving nation. I will in full transparency not only explain these points to the Japanese people but also continue my efforts to paint a clear picture to relevant countries and gain their understanding.
I have now given an overview of building up our defense capabilities in order to defend Japan. Reinforcing our defense capabilities is something that cannot be achieved without the cooperation and understanding of the public.
Ukraine's dogged determination provides an excellent demonstration of the importance of each one of us having a conscious orientation towards actively defending the nation.
At this major turning point in Japan's security policy, I ask once more for the cooperation of the Japanese people in order for us to carry out our responsibilities towards future generations.