Japan’s largest budget in history finalized; $770 billion.
This is the first overall upward revision in 12 years, taking into account rising prices and other economic factors. Based on the results of the preliminary review, the government is preparing a final budget proposal for next year and aims to set the total public account at around 122.3 trillion yen (≈ $770 billion).
This is more than 7 trillion yen ($44 billion) more than the initial budget for the current fiscal year of just over 115.19 trillion yen, setting a new record.
In terms of spending, social security spending will rise to around 39.1 trillion yen, and government bond spending, which is used to repay and pay interest on government bonds, will reach a new record of around 31.3 trillion yen due to rising interest rates.
On the revenue side, tax revenue is expected to hit a record high of around 83.7 trillion yen, but the government is planning to issue new government bonds worth around 29.6 trillion yen, which is expected to exceed the initial budget of around 28.6 trillion yen for the current fiscal year.
The government plans to approve next year’s budget proposal at a cabinet meeting on December 26.
Internal Affairs and Communications Minister Agrees to 20.2 Trillion Yen Local Allocation Tax Budget
In talks between Internal Affairs and Communications Minister Katayama and Finance Minister Abe, it was agreed that the total amount of local allocation taxes will be 20.2 trillion yen, 1.2 trillion yen more than at the beginning of the current fiscal year.
In addition, local governments’ loss of revenue due to the cancellation of temporary tax rates on light oil collection tax, local taxes, and the “environmental performance tax,” which is a tax levied based on the fuel efficiency of vehicles when they are purchased, will be fully compensated by grants.
“I believe that we have done our best to ensure that local governments can respond to the needs of their residents and operate administrative services sustainably,” Internal Affairs Minister Hayashi told reporters.