The Cabinet on Sunday approved a 82.91 trillion yen budget for fiscal 2007 that could help the government achieve the so-called primary balance -- a key benchmark of fiscal soundness -- earlier than its target of 2011, but experts say policy steps planned for next year will leave the ballooning social security bill unaddressed.
The government has probably delivered on Prime Minister Shinzo Abe's advertised commitment to rehabilitate the debt-ridden fiscal state through a sharp cut in new bond sales -- a reduction of 4.54 trillion yen, the largest on record, from 29.97 trillion yen originally planned for 2006. New government bonds are used to secure funds to offset revenue shortfalls.
However, experts say the Abe administration has a long way to go before it gets the snowballing debt under control as well as meeting the massive social security bill amid expensive medical services and pensions to support the aging population.