Japan’s cabinet, led by Prime Minister Shinzo Abe, on Thursday approved a record 96.7 trillion yen ($799.9 billion) budget for fiscal 2016 that aims to boost growth with higher tax revenue.
Tax revenue is forecast to be a 25-year high of 57.6 trillion yen on the back of stronger corporate profits, thanks to a weak yen.
Defense spending is set to exceed 5 trillion yen for the first time. The outlay was raised for a fourth year in a row, by 1.5 percent to a record 5.05 trillion yen as Japan tries to safeguards its interests in the East China Sea from China’s interventions.
Social security spending was increased by 1.4 percent to a record 31.9 trillion yen and claimed the biggest share in the budget. More measures will be adopted for childcare and caring for the old.
The prospect of higher revenues made the government lower its new bond issuance to 34.43 trillion yen. The ratio of bond issuance to budget revenue was 35.6 percent, which was the lowest in nine years.
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