Japan's lower house approved Tuesday a record 107.60 trillion yen ($938 billion) draft budget for fiscal 2022 swollen by growing social security and national defense costs, setting the stage for its enactment before the year starts on April 1.
It is the second-fastest passage of an initial budget by the House of Representatives under Japan's postwar Constitution, after the Feb. 19 passage of the fiscal 1999 budget.
The general-account budget will be a record high for the 10th year in a row, up from the initial 106.61 trillion yen for fiscal 2021.
Following the passage, the budget will be deliberated by the House of Councillors. The Constitution stipulates automatic enactment of a budget 30 days after it is sent to the upper house.
In a rare move, the opposition Democratic Party for the People backed the draft budget, in addition to the ruling coalition of Prime Minister Fumio Kishida's Liberal Democratic Party and its junior partner Komeito that controls both houses of parliament.
Yuichiro Tamaki, leader of the Democratic Party for the People, told reporters Monday that his party had made the decision after Kishida said he would consider reinstating a "trigger clause" to temporarily suspend the imposition of a gasoline tax provision as a measure to curb surging oil prices.
The provision cuts gasoline taxes by 25 yen per liter when Japan's average regular retail gasoline price remains above 160 yen per liter for three months in a row. It was frozen after the massive earthquake and tsunami in March 2011 to secure sufficient fiscal resources.
Under the next fiscal year's initial budget, the largest-ever amount of 36.27 trillion yen will be spent on social security services for the nation's rapidly aging population, up by around 440 billion yen from the previous year and accounting for over a third of total national expenditure.
Defense spending will total 5.40 trillion yen, hitting a record high for the eighth year in a row, as Japan seeks to beef up its capabilities in new domains such as cyberspace and outer space, in the face of China's growing assertiveness and the North Korean missile and nuclear threats.
Amid a resurgence of coronavirus infections driven by the highly transmissible Omicron variant, the initial budget includes 5 trillion yen in reserve funds for future responses to the pandemic, the same amount set aside for the current fiscal year.
While the new bond issuance of 36.93 trillion yen is down from 43.60 trillion yen in the fiscal 2021 initial budget, the government remains dependent on borrowing to finance its expenditures, fueling fears of a further deterioration of Japan's fiscal health, the worst among major developed countries.
The upcoming budget includes 24.34 trillion yen in debt-servicing costs, up from 23.76 trillion yen a year earlier.
