Budget Requests for Defense Expenditures: Implement Procurement Reforms to Reduce Costs

The security environment is becoming increasingly severe, driving the need to strengthen Japan’s defense capabilities. Meanwhile, the nation’s fiscal condition is in a critical state. Procurement reforms must be advanced to reduce costs.

The deadline has passed for budget requests from each ministry and agency for fiscal 2024. The total amount will likely reach about ¥114 trillion, the largest ever.

Particularly notable is the growth in defense spending. The Defense Ministry has requested a total of ¥7.7385 trillion, exceeding ¥7 trillion for the first time and up by 17% from the initial budget for fiscal 2023.

Late last year, the government decided on a plan to spend about ¥43 trillion on defense over the five years from fiscal 2023 to fiscal 2027. The latest requests were made in the second year of this plan.

It is necessary to steadily implement the plan and enhance the Self-Defense Forces’ response capabilities.

Regarding specific defense equipment, ¥755.1 billion was earmarked for the development and acquisition of long-range missiles for the purpose of securing counterattack capabilities to strike enemy missile launching sites. 

In addition, ¥930.3 billion was requested for procuring ammunition, which has been noted for years to be in short supply. 

In the area of missile defense, the core of the defense policy, the ministry included ¥379.7 billion for the construction of two Aegis system-equipped ships. These vessels will have higher interception capabilities than the eight Aegis-equipped destroyers the nation currently possesses.

The envisaged vessels will replace the land-based Aegis Ashore missile interception system, the introduction of which the government gave up on three years ago. It is said that the deployment of these two ships will enable constant surveillance of the whole of Japan. It can be said that the deployment will have a significant deterrent effect.

However, the Maritime Self-Defense Force, which has long been plagued by a personnel shortage, will likely bear an increased burden. Even if advanced equipment is introduced, it will be meaningless if that equipment cannot be fully utilized due to a lack of human resources.

It is urgent for the government to improve the treatment of SDF personnel in order to secure human resources. It would also be advisable to flexibly utilize relevant human resources, for instance by letting the relatively well-staffed Ground Self-Defense Force be in charge of the security at MSDF bases.

In recent years, the three forces of the SDF — the GSDF, the MSDF and the Air Self-Defense Force — have started jointly acquiring parts for helicopters and other equipment, from the perspective of integrating their operations. However, most equipment requests are made separately by the three forces. Improving the efficiency of procurement remains a challenge.

The ministry should further proceed with package purchases and scrutinize the cost of equipment.

A total of ¥950.3 billion was earmarked for Foreign Military Sales, under which the government purchases equipment from the United States. The framework enables the introduction of cutting-edge equipment, but because the United States controls pricing, procurement costs tend to soar.

The ministry must persistently negotiate with the U.S. government to reduce prices and ensure transparency in the framework.

(From The Yomiuri Shimbun, Sept. 4, 2023)