The initial general account budget for fiscal 2013 will total around ¥92.6 trillion, down from ¥92.9 trillion last year, an outline of the government’s draft budget showed Saturday.
The figure is lower than earlier projections in excess of ¥93 trillion. However, Prime Minister Shinzo Abe is eyeing a supplementary budget in the fiscal year from April 1 to rejuvenate the economy, which could necessitate additional issuance of government bonds to generate more funding.
Tax revenue for the next fiscal year is projected to reach ¥43.1 trillion, exceeding new bond issuance by the government — estimated at ¥42.9 trillion — for the first time in four years. Meanwhile, defense expenditures will increase for the first time in 11 years, by around ¥40 billion, amid escalating tensions with China over the sovereignty of the Japan-administered Senkaku Islands.
The draft budget will be approved at a Cabinet meeting Tuesday and submitted to the Diet around Feb. 28.
Of the ¥92.6 trillion in total expenditures, ¥22.2 trillion will be allocated to service the national debt and the remaining ¥70.4 trillion will be used to fund government policies, including ¥5.3 trillion for public works. Spending on public works in 2013 is expected to jump by roughly ¥700 billion compared with the initial budget for the current fiscal year.
The government has also decided to abolish a reserve fund for economic crises that was introduced in fiscal 2010, in the aftermath of the 2008 global financial crisis. Some ¥910 billion was earmarked for the fund in the year to March 31, and its termination will further contribute to trimming the budget for fiscal 2013.