Home>News Center>World
         
 

Japan's cabinet approves draft budget
(Agencies)
Updated: 2004-12-20 20:53

Japan's Cabinet on Monday endorsed a draft 82.18 trillion yen ($788.7 billion) national budget for fiscal 2005, increasing overall spending to care for an aging population and to pay interest on government debt.

The plan trims defense and education spending, however, in an attempt to control deficit spending.

The Finance Ministry draft, which now goes back to ministries for review before a final Cabinet vote on Friday, also calls for a cut in new bond issuance to ease the country's snowballing national debt. The document is to be presented to Parliament in January.

The proposal, for the year starting April 1, charts a 0.1 percent increase in total spending, but cuts 0.7 percent from general account expenditures, which encompasses discretionary spending outside of debt servicing and other compulsory costs.

While departments from education and defense to public works and overseas aid face cuts, the social security allocation rose 2.9 percent, underscoring rising costs of supporting Japan's rapidly aging population.

Spending on social security, at 20.37 trillion yen ($195 billion), is by far the biggest single part of the national budget. It is followed by interest on the national debt, which will cost 5.0 percent more next year because of a rise in outstanding bond issues.

Defense spending will be cut for the third year in a row, this time by 1.0 percent to 4.86 trillion yen ($46.6 billion). The spending cuts come despite Japan's shift toward a more active international military stance.

Restraining non-social security spending should enable the government to trim the issuance of new government bonds to 34.39 trillion yen ($330 billion), down 2.2 trillion yen ($21.1 billion) from this fiscal year, officials said.

"We have maintained and strengthened our position to reform government spending," Finance Minister Sadakazu Tanigaki said in outlining the draft budget. "We were able to curb spending while shifting funds to key areas to compile an efficient budget."

Prime Minister Junichiro Koizumi said he was satisfied with the outcome.

"The budget draft turned out to be a good one," he said. "It generally follows our (reform) policy, although it still has to be fine-tuned."

Japan's deficit will stand at 15.95 trillion yen ($153.1 billion) in fiscal 2005, down 3.1 trillion yen ($29.7 billion) from the current fiscal year for the second straight year of improvement.

But this is still far from the government's goal of achieving a surplus by which tax revenues exceed expenditures minus debt-servicing costs in the early 2010s.

Japan's outstanding long-term debt will also rise to 1.51 times gross domestic product by March 2006, breaking Tokyo's own record for the highest debt burden in the industrialized world. The previous high, from this year, was 1.46 times GDP.

In an apparent effort to find new buyers for Japanese government debt, Finance Ministry officials will travel to London and New York next month. Currently, only 3 percent of outstanding Japanese government bonds are held by foreign investors, low by international standards.



 
  Today's Top News     Top World News
 

President Hu toasts Macao five years after return

 

   
 

China issues reforms on jury system

 

   
 

SOE reforms expected to end within 3 years

 

   
 

Aviation deal marks export first

 

   
 

Hong Kong urged to treasure achievements

 

   
 

Bush: Iraqi troops not ready to take over

 

   
  Allawi says rebels in Iraq seek civil war
   
  Bush: Iraq bombers 'are having an effect'
   
  Bush: Iraqi troops not ready to take over
   
  50 suspects detained in Najaf bombing
   
  YUKOS awaits Russia's next move after mystery sale
   
  Japan's cabinet approves draft budget
   
 
  Go to Another Section  
 
 
  Story Tools  
   
  Related Stories  
   
Poll shows Japanese frosty toward Chinese
   
Japan delays sanctioning North Korea
   
Japan, US sign missile defense agreement
   
China: "Sex slave" issue a severe crime
   
Embassy: No decision made on Japanese aid
   
Nanjing remembers the massacred
   
Japan defense plan shifts pacifist stance
  News Talk  
  Are the Republicans exploiting the memory of 9/11?  
Advertisement