Tokyo: Japan’s lower house of Parliament on Tuesday approved a record 114.38 trillion yen ($836.90 billion) budget for fiscal year 2023, with record allocations made for social security costs while controversial defence spending has been factored in despite the country’s grim fiscal health.
A record 36.89 trillion yen ($269.81 billion), the largest amount ever, has been included in the budget for ballooning social security costs in a bid to deal with Japan’s rapidly aging population.
The government’s budget also includes 6.82 trillion yen ($49.88 billion) in defence spending, Xinhua news agency reported.
This is part of the government’s plans to bolster its defensive capabilities, with the broader five-year plan drawing staunch criticism from the public, Opposition parties and scholars, in no small part due to the plan running contrary to Japan’s constitutionally-bound pacifist stance.
For the year from April, non-tax revenue will be used to fund the government’s defence outlays according to the budget.
From fiscal year 2024 or later, however, a publicly-denounced hike of corporate and income tax, as well as an increase in tax of some consumer products, will be used to finance Japan’s contentious broader defence spending plans.
Public objections aside, Opposition party lawmakers have quizzed Japanese Prime Minister and leader of the ruling Liberal Democratic Party (LDP) Fumio Kishida to explain exactly why the pacifist nation needs to drastically build up its defences and pay for it by hiking taxes.
The Democratic Party for the People, for example, has removed the support it had previously shown for the government’s fiscal year 2022 budget, saying it is now opposed to plans to raise defence spending and hike taxes to fund it.
To fund the state budget, the government will issue 35.62 trillion yen ($260.53 billion) in bonds, adding to Japan’s national debt which is more than double the size of its economy and the worst among industrialised countries.
After passing the more powerful lower house, controlled by the ruling LDP-led coalition, the budget will automatically come into effect 30 days after deliberations begin in the upper chamber of Japan’s bicameral parliament.
Debate in the upper house is a formality and the budget’s approval or not in the less powerful chamber will have no bearing on its enactment.
–IANS