Japan enacts record-high FY 2018 budgepromo braceletst on soaring welfare costs, military spending

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TOKYO - Japanese parliament enacted on Wednesday a record-high 97.71 trillion yen ($926 billion) budget for fiscal 2018 with soaring social security costs and military spending.

Japan"s House of Councillors approved the budget plan Wednesday after it was greenlighted by the House of Representatives on Feb. 28.

According to the budget, the fiscal year starting from April 2018 will see a record-high 74.41 trillion yen ($701 billion) earmarked for policy spending in the general account of the Japanese government.

Among the major outlays, spending on social security will rise to a record high of some 32.97 trillion yen ($311 billion), accounting for a third of the total budget, on the back of the increasingly aging society of Japan.

Defense spending, another major outlay, also hit a record-high of 5.19 trillion yen ($49 billion), rising for the sixth straight year since Prime Minister Shinzo Abe took office in 2012.

Among the defense spending, some 730 million yen ($6.88 million) are expected to be used to prepare for the introduction of the US-developed land-based "Aegis Ashore" missile defense system.

Debt serving expenses, including payment for interests, are to reach 23.30 trillion yen ($219 billion).

The spending is expected to be mainly covered by taxes and other revenues collected by the government, with tax revenue predicted to leap to 59.08 trillion yen ($557 billion).

The government, meanwhile, expects to reduce its dependence on debt, though very slightly, to 34.5 percent, from the 35.3 percent in the fiscal 2017, with issuance of new bonds expected to fall to 33.69 trillion yen ($317 billion) in fiscal 2018.

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.

The current budget plan is the first since Prime Minister Shinzo Abe, in essence, abandoned the government"s target of achieving a primary budget surplus by fiscal 2020 by opting to raise spending on child welfare and education.