Prime Minister Fumio Kishida faced an uphill battle, as the government's draft of the Basic Policies for Economic and Fiscal Management and Reform had to be revised repeatedly at the request of members of the Liberal Democratic Party.
Kishida will have to make more tough decisions in the coming days as he coordinates with his party on issues including budgeting for next fiscal year, observers said.
"As stated in the basic policy, Japan will drastically strengthen its defense capabilities within five years," the prime minister said at a joint meeting of the Council on Economic and Fiscal Policy and other bodies at the Prime Minister's Office on Tuesday. "To secure the necessary budget, we will hold discussions based on a three-pronged approach: the content, amount and financial resources."
He added the time frame of "within five years" to the new policy in response to a request from former Prime Minister Shinzo Abe.
Abe had asked that the Kishida Cabinet set a goal of increasing defense spending to at least 2% of gross domestic product within five years. Kishida agreed to some of Abe's demands, but emphasized that the discussion was based on a combination of content and financial resources.
Kishida takes the position that it is important to accumulate the necessary funding. His statement about a three-pronged approach comes amid a battle with LDP lawmakers who favor aggressive fiscal policy.
In coordinating with his party, the prime minister was determined to use the phrase "steadily promote integrated reform of the economy and public finances based on the 2021 basic policy." As the 2021 basic policy stipulates the continuation of spending reform efforts, Abe and other LDP members taking a proactive fiscal stance demanded that this phrase be deleted.
There was insufficient communication between the Prime Minister's Office and LDP members including Abe, and the prime minister was asked how to convince such LDP members before the Cabinet decision was made on Tuesday.
Within the Prime Minister's Office, there was growing dissatisfaction regarding Abe and other members who requested the revisions just before the government was to approve the basic policy. Some within the Prime Minister's Office dug in their heels, with one saying, "We should not give in even an inch [to Abe]."
Kishida eventually initiated the adjustment himself. He called Sanae Takaichi, the chair of the LDP's Policy Research Council, to the Prime Minister's Office on Monday and informed her that he would not delete the phrase.
In response, Takaichi proposed including the statement, "However, there should be no narrowing of important policy options," and the prime minister agreed.
Kishida was forced to take Abe into consideration because the 45-member Kishida faction is only the fourth largest faction in the LDP. He therefore cannot overlook the existence of the Abe faction with its 94 members, the largest in the party.
The prime minister will continue to face issues related to financial resources, as he needs to realize his signature policy of a "new form of capitalism." Kishida has publicly stated that he aims for both the government and the ruling party to have power, but some LDP members believe that he will be forced to continue to navigate a difficult course.
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