Kishida calls tax hike ‘essential’ to strengthen Japan’s defense

The Yomiuri Shimbun

13:24 JST, December 11, 2022

Prime Minister Fumio Kishida has expressed his intention to raise taxes in stages toward fiscal 2027 to fund a drastic enhancement of the nation’s defense capabilities.

“It is essential to have the financial resources to sustain defense capability in order to maintain and strengthen it into the future,” Kishida said during a press conference on Saturday evening.

He rejected the possibility of issuing government bonds to fund defense spending, saying, “We cannot take this path, considering our responsibility to future generations.”

Kishida stressed the government would decide on the funding policy at the end of the year, aiming to increase annual tax revenues to ¥1 trillion in fiscal 2027. He did not specify the timing of any tax hikes, saying it would be “flexible.”

Regarding the possibility of dissolving the House of Representatives and holding a general election or reshuffling the Cabinet, Kishida said he is “not at all thinking about those matters.”

He also said that the government intends to check the effectiveness of the comprehensive economic measures, which were formulated during the extraordinary Diet session, through the system to “check the progress of all projects in the supplementary budget on a weekly basis and aggregate the results.”

In addition, Kishida also expressed his intention to increase the lump-sum childbirth benefit, which is paid as an insurance benefit, from ¥420,000 per child to ¥500,000 beginning the next fiscal year, which starts in April 2023. This would be the first time since 2009 that the lump-sum payment has been raised and would mark the largest increase ever.

The financial resources to fund the increase would come from the medical insurance system for elderly people ages 75 and over, starting in fiscal 2024. According to estimates by the Health, Labor and Welfare Ministry, the average annual increase per person in the medical insurance system for the elderly will be ¥1,390.