Japan cabinet approves $1 trillion annual budget

Japan cabinet approves $1 trillion annual budget

TOKYO - Agence France-Presse
Japan cabinet approves $1 trillion annual budget

Japanese Prime Minister Shinzo Abe (C), holds a cabinet meeting at the PM’s official residence in Tokyo, where the annual budget was approved. AFP photo

Japan’s cabinet yesterday set to approved a $1.02 trillion annual budget with boosts in defense and public works spending amid a festering territorial row with China and a renewed assault on deflation.

The cabinet approved a 92.61-trillion-yen ($1.02 trillion) budget for fiscal 2013, with revenue estimated at 43.1 trillion yen and new bond issuance at 42.85 trillion yen -- the first time in four years revenue will have been greater than new bond issuance, local reports have said.

The budget is down from the 92.9 trillion yen allocated in the fiscal 2012 initial budget, the first decrease in seven years, they said.

Military spending up

But the defense budget is up by 40 billion yen or about 0.8 percent from the previous year to 4.75 trillion yen, the first rise in 11 years, at a time Japan is embroiled in a row with China over a chain of islands in the East China Sea.

Beijing has repeatedly sent vessels to the disputed waters, prompting calls in Japan for more measures to defend the Tokyo-controlled islands, called the Senkakus in Japan but known as the Diaoyus in China.

Defense Minister Itsunori Onodera has said the military will add nearly 300 personnel to help defend the disputed islands.

Meanwhile, public works spending rises for the first time in four years, growing by 710 billion yen to 5.29 trillion yen, reports said. Prime Minister Shinzo Abe, who took office in December, has pledged to pull Japan out of years of deflation by active government spending coupled with aggressive monetary easing by the Bank of Japan. Abe’s government announced a $226.5 billion stimulus package earlier this month.