Abe government to table a record ¥96-trillion budget
Tokyo (AsiaNews) - The Japanese government will propose a record budget for next fiscal year of more than ¥96 trillion (US$ 810 billion). It will include containing welfare costs whilst increasing discretionary spending in areas such as defence.
Abe, who won resounding victory in last month's parliamentary election, plans to have his cabinet approve the budget on Wednesday and submit to an upcoming session of the Diet before the start of the next fiscal year on 1 April.
The budget's stated purpose is to curb Japan's huge debt, which, at more than twice GDP, is largest in the industrial world.
For conservative economists, close to the government, this is needed because of years of "slow growth" and huge expenditures to stimulate the economy.
Abe's fiscal policies, known as "Abenomics", is to lower borrowing whilst boosting tax revenues.
The draft budget for fiscal 2015, which begins April 1, is up from this fiscal year's initial ¥95.9 trillion, two officials said Sunday.
Yet, spending restraint and a surge in tax revenues as the economy recovers should allow the government to cut bond issuance by ¥4.4 trillion to ¥36.9 trillion, the third decrease in a row and the lowest level in six years, they added.
With the budget deficit - excluding new bond sales and debt servicing - projected at roughly 3 per cent of gross domestic product for the 2015-2016 fiscal year, Abe will meet the administration's promise of halving the debt ratio from 2010-2011 levels.
However, for the Japan Times, the "Finance Ministry calculations show that the goal of balancing the budget by 2020-2021 remains ambitious."
As part of his policy, Abe raised the consumption tax last 1 April from 5 per cent to 8 per cent, a move that sent the economy into recession.
As a result, he postponed a second increase, to 10 per cent, by 18 months to April 2017.
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