The government, which will show an outlay of defense spending in its Mid-Term Defense Program for the next five fiscal years from 2019 to 2023, has now entered into final coordination to set it at over 25 trillion yen. Though the program will include over 27 trillion yen to procure defense equipment, the government will hold down the broad outline of actual defense spending through such steps as procurement reform. But the amount of spending could increase if the reform fails.
The Mid-Term Defense Program is to specify defense equipment to be procured in the next five years and show a general framework of defense spending during the period. The program is to be revised every five years, and the government will make a cabinet decision on it within the year.
The current program specifies an estimated outlay of 24.67 trillion yen to procure defense equipment over the five fiscal years from 2014. It also stipulates that the government will reduce the amount through procurement reform to eventually keep down the broad outline of defense expenditure at about 23.97 trillion yen for the five years.
According to multiple sources, the cost of equipment procurement to be included in the next midterm plan will be over 27 trillion yen, an increase of more than 2 trillion yen over the previous plan. Meanwhile, the government will keep the general framework for defense spending at more than 25 trillion yen with cost reductions through procurement reform as it did last time to eventually hold it down with an increase of about 1.5 trillion yen. The new broad outline of defense spending will be the largest, surpassing 25.01 trillion yen specified in the plan starting fiscal 2001.
The annualized rate of increase in defense spending in the new plan will be 1.1%, outpacing the current plan’s 0.8%. Defense spending, which has increased for a sixth straight year since the launch of Prime Minister Shinzo Abe’s second government, will likely continue setting a record high.