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Wednesday, March 28, 2018, 23:25
Japan enacts record US$926b budget for FY 2018
By Xinhua
Wednesday, March 28, 2018, 23:25 By Xinhua

An employee counts Japanese 10,000 yen banknotes at the Korea Exchange Bank headquarters in Seoul, South Korea, March 16, 2015. (SEONGJOON CHO / BLOOMBERG)

TOKYO - Japanese parliament enacted on Wednesday a record-high 97.71 trillion yen (US$926 billion) budget for fiscal 2018 with soaring social security costs and military spending.     

Japan's House of Councillors approved the budget plan Wednesday after it was greenlighted by the House of Representatives on Feb 28.   

According to the budget, the fiscal year starting from April 2018 will see a record-high 74.41 trillion yen earmarked for policy spending in the general account of the Japanese government.     

Among the major outlays, spending on social security will rise to a record high of some 32.97 trillion yen, accounting for a third of the total budget, on the back of the increasingly aging society of Japan.     

Defense spending, another major outlay, also hit a record high of 5.19 trillion yen, rising for the sixth straight year since Prime Minister Shinzo Abe took office in 2012.     

ALSO READ: Japan's record budget puts fiscal discipline in doubt

Among the defense spending, some 730 million yen are expected to be used to prepare for the introduction of the US-developed land-based "Aegis Ashore" missile defense system.     

Debt serving expenses, including payment for interests, are to reach 23.30 trillion yen.   

The spending is expected to be mainly covered by taxes and other revenues collected by the government, with tax revenue predicted to leap to 59.08 trillion yen. 

The government, meanwhile, expects to reduce its dependence on debt, though very slightly, to 34.5 percent, from the 35.3 percent in the fiscal 2017, with issuance of new bonds expected to fall to 33.69 trillion yen in fiscal 2018.    

The government, which uses debt for financing more than other developed economies, however, is still burdened with arrears that continue to stand as the highest in the industrialized world, amounting to more than twice the size of Japan's economy.     

The current budget plan is the first since Prime Minister Shinzo Abe, in essence, abandoned the government's target of achieving a primary budget surplus by fiscal 2020 by opting to raise spending on child welfare and education.

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