Photo/Illutration Prime Minister Fumio Kishida speaks at a meeting on economic policy on June 7. (Koichi Ueda)

Japan is set to significantly expand defense spending, according to a policy package praised by hawks in the ruling Liberal Democratic Party and criticized by those seeking to restore fiscal health.

The Cabinet on June 7 approved the Basic Policies for Economic and Fiscal Management and Reform, the first such package under Prime Minister Fumio Kishida’s administration.

Although the package promised to sharply increase defense spending, the policies did not mention how the government will secure the needed revenues.

The main opposition Constitutional Democratic Party of Japan blasted the planned hike in defense spending as unwise. Officials in the Finance Ministry also expressed concerns about the move.

The spending plan will likely spark intense debate as the government compiles its draft budget for next fiscal year after summer.

Although the text of the policies does not specify a numerical target for defense spending, it did mention that Japan aims to achieve a level comparable to NATO nations, which are supposed to spend “more than 2 percent of their gross domestic product” on defense.

Japan’s defense expenditures for the initial fiscal 2022 budget totaled 5.4 trillion yen ($40.9 billion), roughly 1 percent of the nation’s GDP.

The comparison with NATO was initially mentioned in a footnote of a draft document. But it got “upgraded” to the text as a result of intensifying pressure from the LDP.

LDP lawmakers, including former Prime Minister Shinzo Abe, also succeeded in including a timeline for the increase in defense spending.

The text calls for a drastic strengthening of Japan’s defense “within five years.”

The LDP’s calls grew louder after Kishida told visiting U.S. President Joe Biden in May that Japan will “considerably expand its defense spending to drastically bolster its defense capability.”

The text also states that the government will “stick with the banner of trying to restore fiscal health as it was before.” It did not specify a target year for achieving a primary balanced budget for the central and local governments.

The Kishida administration had initially set fiscal 2025 as the target year. But the target year was dropped, even from the initial draft, because of opposition from the LDP.

LDP lawmakers associated with the defense industry expressed relief over how the document turned out.

The party’s policy proposal was effectively for Japan to strive to secure a defense budget that accounts for at least 2 percent of GDP within five years.

“The connection between the 2 percent yardstick and a timeline of within five years was not clearly shown in the text, but it still mirrors our party’s proposals,” one LDP member said.

If defense spending were raised to 2 percent of GDP, Japan would need to secure an additional 5 trillion yen, an amount equivalent to annual revenue from a 2-percentage-point hike in the consumption tax rate.

But the report did not mention where the funds will come from or how exactly they would be used for the Japan’s defense and security.

Junya Ogawa, policy chief of the CDP, denounced the increased defense costs.

He said that 5 trillion yen could be used to provide free college education and expand child allowances.

“We can spend that money in a more sensible way,” he said.

The Finance Ministry is expressing caution about the steep rise in defense costs.

Details of the review of the National Security Strategy, the National Defense Program Outline and Midterm Defense Buildup Program are expected to be completed by year-end.

The ministry is set to check for any runaway increases in the defense budget before then.

“All crucial things related to defense will be decided by year-end,” a senior official with the Finance Ministry said. “This year will be tough.”

Another notable part of the policies is the government’s pledge to use nuclear power to the “maximum extent” in its clean energy strategy, the first such vow since the 2011 Fukushima nuclear disaster.

The government dropped its pledge made last year’s to “reduce reliance on nuclear power as much as possible.”

(This story was compiled from reports by Keishi Nishimura, Naoki Matsuyama and Kuniaki Nishio.)