The Japanese government enhanced budgetary allocations to record levels in social security costs and military spending in its fiscal budget for 2018 which comprised a total budget of 97.71 trillion yen (926 billion U.S. dollars) and passed by the country’s parliament and enacted on Wednesday.
The House of Representatives of the country passed the budget earlier on Feb. 28, following which it was passed by Japan’s House of Councillors on Wednesday.
The general account of the Japanese government will see a record-high 74.41 trillion yen (701 billion U.S. dollars) earmarked for policy spending in the fiscal year starting from April 2018 according to the budget.
Social security spending by the Japanese government would account for about one third of the total budgetary allocation with a record high of some 32.97 trillion yen (311 billion U.S. dollars) and this was the most important aspect of the budget. This was driven by the fast aging population of the country.
Since Prime Minister Shinzo Abe took office in 2012, this year marked the sixth consecutive year when the government has increased its spending on security and defense with a record-high of 5.19 trillion yen (49 billion U.S. dollars) and formed an important component of the budget. The country is expecting to introduce the U.S.-developed land-based “Aegis Ashore” missile defense system and for that purpose about 730 million yen (6.88 million U.S. dollars) is the anticipated costs within the entire defense budget.
23.30 trillion yen (219 billion U.S. dollars) of the budget would be used for debt serving expenses, including payment for interests.
The government expects that the tax revenue that it will manage to collect this year would increase 23.30 trillion yen (219 billion U.S. dollars) and this would form the major components of the government’s plan to finance the proposed budget and the announced spending.
There is also expectation by the government of being able to reduce its dependency on debt financing – even though ever so slightly, to 34.5 per cent of the total budget from the earlier figure of 35.3 per cent that it incurred last year. the government also expected to reduce issuance of new bonds to about 33.69 trillion yen (317 billion U.S. dollars) in the current fiscal year.
The arears of debt for the Japanese government is amongst the highest in the developed economies which is double the actual size of the total value of its economy and the government has been tormented by this debt burden – which is higher than the other developed economies.
The Abe government has decided to increase spending on child welfare and education which is an indication that the current government has forsaken its target of achieving a primary budget surplus by fiscal 2020 according to the current budget plan.
(Adapted from Xxinhuanet.com)