MOF Wants Defense Equipment Costs to Be Cut by 1 T. Yen

October 25, 2018

Tokyo- Japan's Ministry of Finance advised on Wednesday a cut of at least one trillion yen in defense equipment procurement spending over the next five years.

The ministry presented the proposal at a meeting of a subcommittee of its Fiscal System Council, an advisory panel to the finance minister, calling for reducing such spending by the current annual target of some 200 billion yen and cutting further after the target is achieved.

The ministry aims to reflect the proposal in the medium-term defense program for fiscal 2019-2023, which will be wrapped up by the government by the end of this year.

On the procurement of defense equipment such as tanks and destroyers, the current defense program for fiscal 2014-2018 includes a total spending cut target of some 700 billion yen through bulk purchases and maintenance method reviews.

After the Acquisition, Technology and Logistics Agency was set up in 2015 and started examining manufacturing costs in fiscal 2017, the government cut annual spending by some 200 billion yen. A total of 770 billion yen is expected to be reduced in the five years from fiscal 2014, exceeding the target.

The ministry will hold negotiations with the Defense Ministry to curb defense budgets, which are swelling similarly to social security costs.

During the subcommittee meeting, budgets for education and energy were also discussed.

The ministry suggested that universities whose number of students fails to reach capacity and those operating in the red should be urged to improve, by severe action such as reducing and suspending subsidies.

In order to increase research with a high level of global competitiveness, the ministry put an increase in spending on new research fields including artificial intelligence on the agenda.

The ministry called for reducing as needed the number of resources development projects mainly through funding by government-affiliated Japan Oil, Gas and Metals National Corp. to private-sector companies, in view of a falling share of oil in energy supplies. Jiji Press