Japan, explained.
Voting in the Diet on 17 December for a supplementary budget for the current fiscal year, Tokyo, Japan (Kyodo News via Getty Images)
Minority government has its challenges, as Prime Minister Shigeru Ishiba is discovering.
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An opposition party could hold the deciding vote on Japan’s national security policyAn opposition party could hold the deciding vote on Japan’s national security policy
For the better part of two decades, Japan’s national security policies have been framed by the ruling conservative Liberal Democratic Party (LDP) and its pacifist junior coalition partner Komeito.
A subject of academic interest has been Komeito’s ability to “punch significantly above its weight” to constrain its larger senior partner, despite only holding 20-odd seats each in the Lower and Upper Houses of the legislature.
Following the last Lower House election in October though, a new political party has entered the fray fitting of this moniker. The Democratic Party for the People (DPFP), an offshoot of the now-defunct Democratic Party of Japan (DPJ), increased its seat total fourfold and has emerged as the minority government’s potential partner to pass legislation through the National Diet.
While it is largely expected to align with the LDP, differences have started to emerge, casting doubt on the established trajectory of Japan’s national security policy.
Utilising its popularity only second to the LDP in recent polls, the DPFP has already started to test its newfound leverage over the ruling parties, successfully negotiating the inclusion of key tax reform in exchange for a supporting vote in the Diet over this year’s supplemental budget, which was passed on 17 December.
While it is largely expected to align with the LDP, differences have started to emerge, casting doubt on the established trajectory of Japan’s national security policy.
The DPFP was originally founded in 2018 by lawmakers from the Democratic Party and the Party for the People – offshoots of the centre-left DPJ and centre-right Party of Hope – before its formal establishment in its current form in 2020 by members who refused to join the now-main opposition Constitutional Democratic Party (CDP), the successor party to the Democratic Party.
The party, which only has 28 Lower House and nine Upper House members, does not have a strong team of experts on national security, unlike the LDP. The main drivers of policy are the leader and former finance ministry official Yuichiro Tamaki, deputy leader and former finance ministry official Motohisa Furukawa, and secretary general and chief of the party’s security policy division Kazuya Shimba. Of the three, only Shimba has experience in the national security space, having served as state minister of defence from 2009 to 2010.
Yuichiro Tamaki, centre, leader of the Democratic Party for the People (Kiyoshi Ota/Bloomberg via Getty Images)
There is broad alignment on the basic contours of national security policy between the ruling parties and the DPFP.
Like the Ishiba administration, the party’s policy platform emphasises the importance of reinforcing deterrence capabilities and possessing strike capabilities for self-defence (counterstrike). It supports strengthening the domestic defence industrial base and bolstering integrated air missile defence systems, as well as beefing up territorial defences in response to Chinese “grey zone” provocations.
The DPFP also agrees with Prime Minister Shigeru Ishiba’s desire to redress the asymmetrical alliance with the United States, including the proposal to revisit the US-Japan Status of Forces Agreement, which has been viewed as a challenging proposition to see through to fruition.
Most recently, the party has provided cover for the LDP’s push to introduce “active cyber defence” – which would enable the government to pre-emptively identify and neutralise cyberattacks on critical infrastructure – urging Ishiba to aim for enactment during next year’s ordinary Diet session. The bill was initially planned for submission to the Diet in late 2024, but uncertainty in the political situation has forced a postponement until next year.
A major area of contention in the coming year will be the planned income tax hike to finance an increase in defence spending to two per cent of GDP by 2027. The government has already pushed back the tax hike by three years, initially deciding in late 2022 to “secure a little over 1 trillion yen (per year) by introducing (a hike) in phases over multiple years toward fiscal year 2027.”
While the DPFP supported a swift doubling of defence spending during the revision of the three strategic security documents in 2022, it has since strongly protested the government’s decision on the income tax portion of the tax hike, which includes a corporate and tobacco tax hike.
A major area of contention in the coming year will be the planned income tax hike to finance an increase in defence spending to two per cent of GDP by 2027.
Its opposition to an income tax hike stems from a domestic political motivation, rather than a national security one, as an income tax hike would contradict its policy objective of increasing workers’ take-home pay. The party’s negotiations over this year’s supplemental budget centered around an agreement to raise the income tax exemption threshold – the amount of income at which income tax kicks in – to achieve this goal.
The resulting compromise has been a decision by the government and ruling parties to commence corporate and tobacco taxes in April 2026, while continuing discussions on whether to commence income tax hikes in January 2027.
According to a government estimate released on 5 December, a one-year delay in implementing the tax hike (starting in fiscal year 2027) would result in a 300 billion yen funding shortfall.
The minority Ishiba government needs the DPFP’s 28 votes in the Lower House to pass meaningful changes to national security policy. So far, all indications are that the DPFP supports Ishiba’s policy approach but breaks with him on fiscal matters.
The path toward raising sufficient funds for defence – complicated by a weak yen cutting into real spending amounts – remains unclear heading into the new year, as the DPFP has refused to engage in talks over the defence tax hike to prioritise raising the income tax exemption threshold.
The breakdown of talks on the tax threshold on 17 December casts further doubt over whether the parties can agree on much-needed defence funding in 2025. The DPFP has gone as far as to threaten voting against the annual budget next year, providing a bigger headache for Ishiba and his party as it navigates the new political dynamics in the Diet.
One thing remains clear: the DPFP will hold de facto veto power to actively shape the government’s national security policies going forward.
The views expressed are those of the author.
About the author
Rintaro Nishimura
Rintaro Nishimura is a Tokyo based senior associate in the Japan practice of The Asia Group, a Washington based strategic advisory firm.
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