Japan's parliament enacts record-high FY 2017 budget on rising welfare costs, military spending

Japan's parliament on Monday enacted a record-high 97.45 trillion yen (884 billion U.S. dollars) budget for fiscal 2017, with soaring social security costs and military spending weighing on the country's tattered fiscal health.

The enactment of the budget came amid heated discussions in parliament over a cut-price land deal scandal that implicates Japanese Prime Minister Shinzo Abe and his wife Akie.

Japan's House of Councilors, dominated by Abe's ruling coalition, cleared the budget late Monday afternoon, a month after the House of Representatives passed the budget.

According to the budget, the fiscal year starting from April 2017 will see a record-high 73.93 trillion yen earmarked for policy spending in the general account of the Japanese government.

Among the major outlays, spending on social security will rise to some 32.47 trillion yen, accounting for a third of the total budget as the Japanese society continues aging.

Defense spending will hit a record-high of 5.13 trillion yen, rising for the fifth straight year since Abe took office in 2012, causing concerns for Japan's neighboring countries.

Debt serving expenses, including payment for interests, are to reach 23.5 trillion yen, accounting for 24.1 percent of the total budget.

The spending is expected to be mainly covered by taxes and other revenues collected by the government, with tax revenue predicted to leap to 57.71 trillion yen, up 0.2 percent from the current year's initial budget.

The government also expects to reduce its dependence on debt, though very slightly, to 35.3 percent from the 35.6 percent in the fiscal 2016 initial budget, with issuance of new bonds expected to fall to 34.37 trillion yen in fiscal 2017.

The government, which uses debt for financing more than other developed economies, however, is still burdened with arrears that continue to stand as the highest in the industrialized world, amounting to more than twice the size of Japan's economy.

 source: Xinhua