TOKYO, Dec. 12 (Xinhua) -- Japanese Prime Minister Shinzo Abe's Cabinet on Thursday approved a 5.5 trillion yen (about 53 billion U.S. dollars) extra budget for the current fiscal year to make provisions for a special economic package announced last week aimed at cushioning the negative impact likely to be caused by the planned sales tax hike next year.
The government said that it would not issue extra bonds to fund the latest budget, as it predicts revenues gained from robust sales tax from the fiscal year through March will be sufficient and come in higher than initial predictions made at the beginning of the year.
The extra budget follows a 13.1-trillion-yen (127.4 billion dollars) extra budget compiled in January, bringing the total amount of government spending to 98.1 trillion yen for the year ending March, according to official data from Japan's Ministry of Finance (MOF).
As the figures show government spending to have increased from the 100.5 trillion yen (977.46 billion dollars) over the same period a year earlier, the Cabinet is now under pressure to reign in its fiscal expenditure next year to below that of the current year, leading economists said Thursday, as Abe's regime has vowed to curb spending, which has seen Japan's national debt balloon to more than twice the size of its economy, and is currently the highest in the industrialized world.
Abe's Cabinet, taking additional debt issuance into account, has additionally compiled a provisional budget for 2014 that seeks to follow the new austerity guidelines as the nation braces for a surge in spending prior to the April 2014 tax hike from 5 to 8 percent and the inevitable lull thereafter as consumers curb their spending, government officials said.
They added that they are also making contingencies for a similar economic fallout expected when the second phase of the tax hike is put into effect, that will see the tax raised again from 8 to 10 percent in October 2015.
The tax hike is aimed at primarily balancing the burgeoning costs stemming from rising social security costs as the nation is rapidly ageing, against a backdrop of an ever-declining birthrate.
The ruling coalition has, in a bid to cater to low-income families who are likely to find the increases in tax a further burden on living, agreed to implement a lower tax system on consumables deemed to be daily essentials, when the tax is raised to 10 percent. The decision was also accepted by the ruling bloc on Thursday.
In terms of short-term spending in 2014, the government has put priorities on earmarking a significant portion of the stimulus package for the ongoing reconstruction work in areas ravaged by the March 2011 earthquake and tsunami disaster, while investing in new public works projects that are seen as generating quick revenue, such as those connected to new infrastructure required for the 2020 Olympics to be hosted in Tokyo.
The government said that 3.13 trillion yen (30.44 billion dollars) will be used for reconstruction work in Japan's northeast and 80.5 billion yen (782.94 million dollars) earmarked specifically for the decontamination of areas near the crippled Fukushima Daiichi nuclear complex that underwent multiple meltdowns following being battered by the 2011 tsunami.
The stimulus package includes mechanisms to increase competitiveness among large corporations, boosting employment opportunities in the labor market for women, as well as making special provisions for young and elderly citizens.
The cabinet said it has earmarked 649.3 billion yen (6.32 billion dollars) to support low income households, families and single parents with children and those seeking to purchase their own homes.
The two budgets aim to cover the nation's fiscal needs for a period of 15 months, government officials said, with Abe stating that he aims to strike a balance between economic growth and austerity measures.
[Video] Japan plans to raise military spending to 240 bln US dollars
BEIJING, Dec. 11 (Xinhuanet) -- Japanese Prime Minister Shinzo Abe says he wants to raise his military spending budget by around 6 percent over the next five years, that’s according to Kyodo news agency.
Abe’s government is requesting a defense budget of more than 240 billion US dollars. The Japanese government says it’s in response to a number of growing security concerns, including nuclear development in the Democratic People’s Republic of Korea. Full story