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Japan’s step-change defence budget and the possibilities for Australia

Japan has closely followed the modernisation of the Chinese armed forces and raised concerns about the nation’s defence capabilities. The Japanese government has responded with an unprecedented defence budget, which provides opportunities for Australian industry. 

The pre-war power has long sought to shake off the chains of the pacifist constitution enforced upon it by the US, UK, Australia and other allies following the end of the war in the Pacific. However, Japan's geo-strategic realities have rapidly evolved since the end of the Cold War, when the US could effectively guarantee the security of the island nation. 

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Growing Chinese assertiveness in the South China Sea and modernisation efforts resulting in the fielding of key power projection capabilities, including aircraft carriers and supporting strike groups, fifth-generation combat aircraft, modernised land forces, area-access denial and strategic nuclear forces, combined with growing political and financial influence throughout the region is serving to shake Japan's confidence. 

As Dr Malcolm Davis of the Australian Strategic Policy Institute (ASPI) recently told Defence Connect, "2018 has been an interesting year in the South China Sea. It started fairly early on with the basing of anti-ship cruise missiles (ASCM) on reclaimed islands in the SCS, the basing of the upgraded, H-6K nuclear capable bomber on Woody Island and more recently the USS Decatur (DDG-73) incident really reinforces that China is not backing down from its territorial ambitions." 

Accordingly, Japanese Prime Minister Shinzo Abe has repeatedly earmarked increased funding for the nation's defence budget, expanding the capabilities of the Japanese Self-Defense Forces (JSDF) and Japan's industrial capability to modernise and equip itself in the face of growing regional instability and tensions. 

The JFY2019 Defense Related Budget Request reinforces Prime Minister Abe's commitment to strengthening the JSDF through a number of initiatives, including: 

  • Renewed focus on strategic partnerships with key allies like the US, Australia and India;
  • Developing key capabilities across existing and new domains, including AI, cyber, space and electronic warfare; and
  • Strengthening and enhancing the industrial capability of Japan to meet the operational and strategic requirements of JSDF. 

Building alliances and strategic partnerships

Strategic partnerships and alliances form the basis of Japan's post-war international engagement. Particularly the relationship with the US, but increasingly, regional powers like Australia and India are playing larger roles in the nation's strategic calculus. 

"The Japan-US alliance as well as defence co-operation with India, Australia, ASEAN countries and other partners can work very effectively in maintaining peace and stability of Japan and the region. Japan should develop a defence capability that can further deepen and expand these endeavours," the Japanese plan states, highlighting the growing importance of strategic alliances. 

The growing focus encouraging structural reform of the nation's industrial and research and development (R&D) capabilities as part of building closer collaboration, improved interoperability and distributed lethality serves as the primary driving factor for this part of the Japanese plan. 

Enhancing old strengths, building new ones

The rate of technological evolution has reshaped the field of warfare and the weapons and platforms that will be used. Japan's proximity to China and developments in the ballistic missile, force projection, cyber capability and anti-space domains has prompted a growing response from Japan across a number of domains.  

Space is an area of intense focus for the JSDF, with the government seeking to invest about 27.01 billion yen in a number of capabilities, including: 

  • 26.8 billion yen to develop a Space Situational Awareness (SSA) System in co-operation with major allies;
  • 180 million yen to enhance the command, control, communication, computer, intelligence, surveillance, reconnaissance (C4ISR) capabilities of the JSDF, including the vulnerabilities of satellites and their countermeasure, space-based electromagnetic surveillance to secure the stable utilisation of outer space; and 
  • 30 million yen to develop and study SSA capability enhancements, including a space-based optical telescope to support the tracking and identification of space debris and unidentified objects that pose a threat to Japan's satellites in geostationary orbit. 

Growing Chinese capabilities in the cyber domain have prompted extensive expansions of Japan's cyber warfare capabilities, including: 

  • Enhancing and expanding the Cyber Defense Group (CDG) to strengthen the initial and advanced response capabilities of the organisation;
  • 3.8 billion yen to procure cyber information gathering devices, with a focus on tactics, techniques and procedures (TTPs) of cyber attacks that may be used against the JSDF and other government organisations; and 
  • 2.4 billion yen to develop external capabilities to respond to cyber attacks against the JSDF and broader Japanese political and economic infrastructure and services. 

Electronic warfare modernisation for key Japanese platforms, like the Japanese Air Self Defense Force's (JASDF) F-15 fighter jets, will enable improved survivability and combat effectiveness in contested environments. 

Additionally, Japan is investing extensively in electronic warfare capabilities, including: 

  • 2.9 billion yen to improve the sharing and processing capability of electronic warfare information of the Japan Aerospace Defense Ground Environment (JADGE); and
  • 20 million yen to support the research and development for the Optimal Joint Electromagnetic Spectrum Management to enable information sharing among Japanese forces for cross-domain joint operation. 

The Japanese government has also embarked on an extensive modernisation program for the wider JSDF, resulting in a number of key procurement programs, including:

  • 91.6 billion yen purchase of 6 F-35A Joint Strike Fighters, with recent announcements identifying that Japan will operate a fleet of about 147 of the fifth-generation aircraft, 105 of the 'A' variant and 42 of the 'B' short-take off, vertical landing variant for operation off the Izumo Class amphibious warfare ships;
  • 8.4 billion yen procurement of the Northrop Grumman RQ-4B Global Hawk ISR unmanned aerial system;
  • 99.5 billion yen for the construction of two, multi-purpose, compact destroyers;
  • 71.1 billion yen for the construction of a new Soryu Class attack submarine; and 
  • Establishing an Airborne Warning and Control Wing within the JASDF. 

Opportunities for Australian industry 

Australian industry, defence and academia are well positioned to benefit from Japan's arms build up across a number of areas. Australian involvement in the global F-35 program, as both a key supply chain contributor and as an Asia-Pacific regional maintenance, upgrade and overhaul hub, combined with the growing interoperability of key naval platforms, serve as catalysts for this integration.

Additionally, Australia's world recognised expertise in space situational awareness (SSA) capabilities, Earth observation, advanced manufacturing and advanced materials, providing high-technology examples to build on from the success of Australia's Bendigo built Bushmaster Protected Mobility Vehicles.

These key capabilities can be combined with Australia's rapidly developing research and development credentials in hypersonics, artificial intelligence and cyber security to enhance the economic and strategic relationship between the two nations. 

In particular, Japan's heavy investment in hypersonic vehicles and the aforementioned SSA capabilities are areas that Australian industry can add value to the Japanese supply chain.  

Australia and Japan are working closely to help maintain a peaceful Indo-Pacific, as affirmed under the Australia-Japan Special Strategic Partnership.

The Australia-Japan relationship is the nation's closest and most mature in Asia and is underpinned by the strategic, economic, political and legal interests of both countries. The countries work closely in strategic alliance with the US, and lead in critical regional partnerships with countries such as India and the Republic of Korea.

Australia and Japan regularly participate in joint defence exercises and frequently consult on regional security issues, such as the nuclear tests and ballistic missile launches undertaken by North Korea.

The Joint Declaration on Security Cooperation (JDSC) signed in 2007 provides a foundation for wide-ranging co-operation on security issues for both countries, including law enforcement, border security, counter terrorism, disarmament and counter-proliferation of weapons of mass destruction. The JDSC also established the regular 2+2 talks between the respective foreign and defence ministers.

More information about the JFY 2019 Budget Request is available here. More information on how to access the Japanese export market is available from the Defence Export Office

Japan’s step-change defence budget and the possibilities for Australia
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