The Cabinet on Wednesday approved a record ¥96.34 trillion general account budget for fiscal 2015, as Prime Minister Shinzo Abe struggles to balance his twin goals of fiscal rehabilitation and economic growth.
Despite an 18-month delay on the implementation of the second consumption tax hike, which will take the rate to 10 percent from 8 percent, the administration is likely to attain its key goal of halving the ratio of the primary balance deficit — comprising annual tax revenue and nontax revenue minus outlays other than debt servicing costs — from the fiscal 2010 level by fiscal 2015.
Spending on policy measures, however, will reach a record ¥72.89 trillion, up ¥2.79 trillion from the fiscal 2014 budget, suggesting that the Abe administration has failed to streamline its expenditures.