Japan’s government sanctioned a record budget for the upcoming fiscal year, significantly increasing expenditures on social welfare in response to an aging population, as well as on defense to address regional threats. The budget, amounting to 115.5 trillion yen ($730 billion) for the period beginning in April 2025, was approved by the Cabinet and includes 8.7 trillion yen allocated for defense spending, as reported by WAM.
Increased social security spending
Additionally, the budget encompasses social security expenditures of approximately 38.3 trillion yen, an increase from 37.7 trillion yen the previous year. In a briefing document, the defense ministry stated that Japan is currently facing its “toughest and most complex security environment” since World War II, echoing a warning issued by Prime Minister Shigeru Ishiba.
Revising defense policies
Japan maintains a pacifist post-war constitution that restricts its military capabilities to what is ostensibly defensive. However, in 2022, it revised key security and defense policies to explicitly acknowledge the challenges posed by China and committed to doubling its defense spending to meet the NATO standard of two percent of GDP by 2027.
The 8.7 trillion yen approved on Friday will facilitate initiatives aimed at attracting recruits to Japan’s Self-Defense Forces and enhancing relations between the U.S. and Japanese militaries with local communities in Okinawa.
Enhancing intelligence capabilities
Funds will also be directed towards establishing a system to gather satellite intelligence on ballistic missile threats, such as those launched by North Korea, as well as monitoring vessels in the waters surrounding Japan, including areas disputed with China. “Strengthening our defense capabilities is something we’re actively working on,” Ishiba remarked at an event organized by the Yomiuri newspaper on Thursday.
“No matter how advanced our military tanks or vehicles are, it’s pointless if we don’t have enough personnel to operate them,” stated the prime minister, who has committed to addressing the shortage of new recruits.
Read more: Japan to cut 60 percent of greenhouse gas emissions by 2035
Demographic challenges ahead
Another pressing issue confronting the nation is its aging demographic, exacerbated by persistently low birth rates and a cautious stance on immigration. Japan ranks as one of the world’s oldest societies, with the proportion of individuals aged 65 and over reaching a record 29.3 percent this year, according to AFP.
Parliamentary approval required
The draft budget must receive parliamentary approval, and the ruling Liberal Democratic Party, along with its smaller coalition partner Komeito, will require support from opposition parties, having lost their majority in an October snap election. Ishiba remains in his role as prime minister despite leading the coalition to its most disappointing general election outcome in 15 years. A vote for the upper house of parliament is scheduled for summer 2025.
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