$790 bn sought for Japan's fiscal 2023 budget, defence spending to rise

The budget requests for fiscal 2023, which starts next April, marked the first drop in five years from the record high of the fiscal 2022 initial budget of 111.66 trillion yen

Japan
(Photo: Bloomberg)
IANS Tokyo
3 min read Last Updated : Sep 01 2022 | 8:01 AM IST

Japan's government departments submitted their general-account budget requests for fiscal 2023 totaling more than 110 trillion yen ($790 billion), with defence spending hitting a record high.

The budget requests for fiscal 2023, which starts next April, marked the first drop in five years from the record high of the fiscal 2022 initial budget of 111.66 trillion yen, but the figure to be adopted by the government at year-end is likely to increase further due to additional costs to tackle soaring prices, the Covid-19 pandemic and a natural increase in social security spending.

Breaking down the total amount, the largest request came from the Ministry of Health, Labor and Welfare on Wednesday, which asked for 33.26 trillion yen, amid continued rises in social security costs stemming from Japan's aging population, Xinhua news agency reported.

The government also sought 4.75 trillion yen in spending related to children and families that will be transferred to a new agency to be launched in April 2023, covering measures to prevent child abuse and support pregnant women and child-rearing.

Moreover, the total for fiscal 2023 was boosted by a record 5.59 trillion yen budget request from the Defence Ministry, the largest amount ever and up from the initial budget in the current fiscal year of 5.45 trillion yen.

The increase in the defence budget comes after Prime Minister Fumio Kishida vowed to "fundamentally reinforce Japan's defence capabilities within the next five years" by substantially increasing the country's defence outlays.

The total defence budget possibly will reach around 6.5 trillion yen as the requests included some 100 items that do not indicate specific price tags, according to government sources.

Currently, social security and national debt servicing are the government's biggest outlays, with Japan, the world's third-largest economy, holding public debt amounting to more than twice the size of its economy, the highest in the industrialised world. Japan is likely to issue government bonds to make up for chronic tax revenue shortfalls, Kyodo News reported on Wednesday.

Leading economists here have said that along with slashing social welfare funding, Japan would likely have to also further raise its consumption tax to finance its future defence spending, a proposition certain to be hugely unpopular and likely rebuffed by the Japanese people.

Japan's Finance Ministry will assess the budget requests and compile the initial draft budget by the end of the year before Diet deliberations.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Subscribe to Business Standard digital and get complimentary access to The New York Times

Quarterly Starter

₹900

3 Months

₹300/Month

SAVE 25%

Smart Essential

₹2,700

1 Year

₹225/Month

Save 46%

Super Saver

₹3,900

2 Years

₹162/Month

Subscribe

Renews automatically, cancel anytime

Here’s what’s included in our digital subscription plans

Access to Exclusive Premium Stories Online

  • Over 30 behind the paywall stories daily, handpicked by our editors for subscribers

Complimentary Access to The New York Times

  • News, Games, Cooking, Audio, Wirecutter & The Athletic

Business Standard Epaper

  • Digital replica of our daily newspaper — with options to read, save, and share

Curated Newsletters

  • Insights on markets, finance, politics, tech, and more delivered to your inbox

Market Analysis & Investment Insights

  • In-depth market analysis & insights with access to The Smart Investor

Archives

  • Repository of articles and publications dating back to 1997

Ad-free Reading

  • Uninterrupted reading experience with no advertisements

Seamless Access Across All Devices

  • Access Business Standard across devices — mobile, tablet, or PC, via web or app

More From This Section

Topics :Japan

First Published: Sep 01 2022 | 8:01 AM IST

Next Story