Ruling parties differ over way to raise funds for defense budget hike

The Yomiuri Shimbun
Koichi Hagiuda, chairman of the Liberal Democratic Party Policy Research Council, speaks at an LDP meeting on Tuesday.

Koichi Hagiuda, chairperson of the Policy Research Council of the Liberal Democratic Party, has expressed caution about using tax hikes to fund an increase in the defense budget.

“Saying everything will be covered by taxes, or giving a wrong impression that taxes will be hiked next year, is not helpful ahead of local elections,” Hagiuda said at an LDP meeting on Tuesday.

The government intends to use government bonds and cut spending in the short term to generate revenue for an increased defense budget, and hopes to consider tax hikes as a future source of revenue.

Hagiuda is also cautious about making an announcement before the end of the year about concrete tax hike measures.

At a press conference on Tuesday, Komeito leader Natsuo Yamaguchi said: “Spending will be cut first and surplus financial resources will be sought … Taxes will ultimately be used to cover the shortfall.”

Yamaguchi stressed that the government should clarify by the end of the year where the financial resources will come from.