Japan Govt Adopts 18.3-T.-Yen Draft Extra Budget

Tokyo, Nov. 28 (Jiji Press)–The Japanese government adopted on Friday a fiscal 2025 draft supplementary budget with 18,303.4 billion yen in general-account spending to finance an economic package centered on aid for household finances and growth investments. It is the first draft budget that has been drawn up under Prime Minister Sanae Takaichi, who advocates “responsible and proactive” fiscal policy. The total outlay is the largest ever for a supplementary budget, excluding the three years through fiscal 2022, when government spending ballooned due to COVID-19 measures. The government plans to finance more than 60 pct of the extra budget through new issuances of government bonds. The draft budget is expected to be submitted to parliament early next month, with the aim of enactment by the end of the year. “We’ll first swiftly implement inflation measures to protect people’s current livelihoods,” Finance Minister Satsuki Katayama said at a press conference. “We want to lower the ratio of the government’s outstanding debt to gross domestic product, achieve sustainable government finances and maintain market trust.” The supplementary budget outlay is far bigger than the 13,943.3 billion yen spent under the fiscal 2024 extra budget. Japan plans to issue an additional 11,696 billion yen in government bonds, exceeding the 6,690 billion yen issued in the fiscal 2024 supplementary budget, further worsening Japan’s fiscal health. Despite securing a 2,879-billion-yen upswing in expected tax revenues, 1,015.5 billion yen in nontax revenues such as the return of money from funds and 2,712.9 billion yen in surplus from the previous fiscal year, these were far from enough to cover expenditures. The draft extra budget allocated 17,702.8 billion yen for the government’s economic package, of which 529.6 billion yen was earmarked for electricity and gas bill subsidies from January to March next year and 367.7 billion yen for an allowance of 20,000 yen per child. It also increased grants to local governments that can be used at their discretion by 2 trillion yen, to support the issuance of rice vouchers and electronic coupons. Meanwhile, 1,383.2 billion yen was set aside for improving working conditions and supporting the management of businesses in the medical and nursing sector. As part of strategic investments through public-private cooperation, the extra budget calls for spending 120 billion yen to revive the domestic shipbuilding industry, which is lagging behind in international competition. It includes investments for promoting research and development, including 189.5 billion yen for artificial intelligence and 128.6 billion yen for quantum technology. The government also allocated 1.1 trillion yen to achieve its goal of raising defense spending to 2 pct of GDP this fiscal year, earlier than the initial schedule of fiscal 2027. END [Copyright The Jiji Press, Ltd.]