Swollen Budget Request

Ministry of Finance wrapped up FY2018 budget request on Thursday. Total amount of the requests from Ministries swelled up to ¥101 trillion, exceeding ¥100 trillion for four consecutive years. Request for social security increased with growing number of aged people in Japanese society. Newspapers criticized lavish economic policy of Shinzo Abe administration.

Requests for implementing policy amounted to ¥77 trillion, exceeding actual FY2017 budget by ¥3 trillion. Spending for pension system and medical treatment increased by ¥649 billion from FY2017, rising up to ¥29 trillion. Special request for promoting Abe’s growth strategy fulfilled its maximum limit of ¥4 trillion. The request for governmental bond decreased for two consecutive years, which amounted to ¥23.8 trillion. Caused by negative interest policy of Bank of Japan, long-term interest for governmental bond was supposed to be staying low.

While Ministry of Health, Labor and Welfare requested the biggest budget of ¥31.4 trillion and Ministry of Land, Infrastructure, Transportation and Tourism increased its request by 16% from last year with necessity for disaster recovery, the most focused was request from Ministry of Defense which amounted to ¥5.2 trillion, increasing from previous year for 6 consecutive years. MoD for the first time requested budget for Aegis Ashore, an anti-ballistic missile system deployed to the land. It was strange for MoD to request budget only for the program without actual amount.

MoD looks serious about threat from North Korea with improving missile technology. The Ministry also requested budget for obtaining revised MS-3 Block IIA, which would extend the range of anti-ballistic missile by twice longer. ¥20.5 billion was requested for improved Patriot Missile, or PAC-3. Budget for studying high-speed gliding missile for island defense, ¥10 billion was also included in the request.

It is doubted whether those high-tech equipments really work well for defense of Japan. Most of those equipments would be procured from major arms industries in United States. While Japanese government is suffering from huge amount of debt, which has exceeded ¥1 quadrillion, it accumulates further debt for the purchase of unreliable defense technology.

Abe administration has not shown viable strategy against intimidation of North Korea. The budget request of MoD looks like doing everything they find one after another without necessary verification of actual effect. It is important for the government to seek viable strategy integrating military with diplomacy. Without it, it would not be able to build a sustainable framework of budget.