Alexa
  • Directory of Taiwan

Japan's Cabinet approves slightly higher budget for 2008 on higher social security costs

Japan's Cabinet approves slightly higher budget for 2008 on higher social security costs

The Japanese Cabinet approved a budget for fiscal 2008 on Monday that is slightly larger than the current year, thanks largely to rising social security costs as Japan's population ages.
Higher social security payments will offset declines in defense spending, overseas aid and public works projects such as roads and bridges.
The 83.06 trillion yen (US$728 billion; euro506 billion) draft budget for the fiscal year starting in April is 0.2 percent higher than the 82.91 trillion yen set for fiscal 2007, and marks the second straight yearly increase.
Prime Minister Yasuo Fukuda's Cabinet, which approved the draft budget from the Ministry of Finance, is expected to send budget bills before Parliament in January, said deputy Cabinet secretary Hiroshi Suzuki. Their passage is expected by the end of March.
The budget proposal highlights rising social security costs and lackluster tax revenues that are hampering the country's financial reform. The possibility of general elections taking place next year may have also discouraged Fukuda's government from aggressive belt-tightening.
Under the proposal, defense expenditure will decrease 0.5 percent, while development aids to overseas countries will be reduced 4 percent. Public works project spending will decline 3.1 percent.
Social security payments, however, are expected to rise 3 percent to 21.78 trillion yen (US$191 billion; euro133 billion).
The government plans to trim new bond sales next year 0.3 percent to 25.35 trillion yen (US$222 billion; euro154 billion) for the fourth straight year of decline. Japan sells new bonds to raise funds to cover tax-revenue shortfalls.
Since reform-minded former Prime Minister Junichiro Koizumi started lessening bond issues during his 2001-2006 tenure, analysts have come to see the amount of new bond sales as a measure of how serious a Japanese government is about fiscal reform.


Updated : 2021-05-11 13:38 GMT+08:00