TOKYO (AFP) – Japan’s cabinet yesterday approved a record budget proposal for the next fiscal year from April, including stimulus for the pandemic-hit economy and another hike in defence spending.
The budget proposal totals JPY106.6 trillion, a 3.8 per cent rise from the current year and the ninth straight annual increase.
Once again the government is seeking a record defence budget, for the seventh year running, this time of JPY5.3 trillion, up 0.5 per cent from fiscal 2020.
Among the key items of military spending are JPY57.6 billion to develop a next-generation fighter and JPY33.5 billion for the development of a new missile.
“We will strengthen the capacity necessary for national defence… to keep pace with the security environment which is becoming increasingly tough,” Chief Cabinet Secretary Katsunobu Kato told a regular briefing.
The overall budget reflects the long shadow cast by the coronavirus pandemic and the growing cost of supporting the country’s ageing population, with social welfare and pension programmes estimated to cost JPY35.8 trillion.
Prime Minister Yoshihide Suga’s Cabinet also wants to set aside a JPY5.5 trillion reserve, likely to be used for further virus measures.
Japan is bracing for falling tax revenues as the coronavirus pressures business activity, and the government will turn to debt to cover about 40 per cent of the budget.
The proposal will now go to Parliament for its approval, expected sometime in spring next year.