TOKYO, Dec 21 (NNN-NHK) – The Cabinet of Prime Minister Shinzo Abe, approved a draft budget for fiscal 2020, aimed at covering ballooning social security costs, amid a rapidly ageing society and dealing with the fallout from a consumption tax hike, that has seen private and public consumption wane.
The 102.66 trillion yen (938.5 billion U.S. dollar) budget, marks the eighth consecutive year Japan drafted a record budget, with spending topping 100 trillion yen for the second straight year, as costs related to the nation’s demographic crisis, involving a rapidly ageing and shrinking population, continue to skyrocket.
The draft budget, comprising record defence spending and allocations, to cushion the downside effects of the Oct 1 sales tax hike from eight to 10 percent, will be submitted to the Diet in Jan, next year.
As for defence, which marks a sixth straight record high, a total of 5.31 trillion yen has been earmarked, to cover outlays on Japan hosting U.S. forces here, as well as, allocations related to spending on cyber space, outer space and other defence-related expenses.
Aimed at cushioning the blow from Oct’s sales tax hike, which saw consumption slump and sentiment among businesses worsen, the draft budget comprises 1.78 trillion yen in stimulus measures, which include a shopping rewards point programme, aimed at spurring consumer spending.
“The budget is aimed at achieving both economic recovery and fiscal consolidation,” Finance Minister, Taro Aso, told a news conference, after the cabinet approved the draft budget.
“Social security will be improved through the use of increased revenue from the consumption tax hike, from eight percent to 10 percent, implemented in Oct,” Aso added, with reference to overall tax revenue estimated to reach 63.51 trillion yen, 1.02 trillion yen higher than the draft budget for fiscal 2019. (1 U.S. dollar equals 109.36 Japanese yen).– NNN-NHK
