Photo/Illutration Record-high defense expenditures in the fiscal 2020 government budget proposal will cover development of a fighter jet to replace the F-2 aircraft used by the Air Self-Defense Force. (Asahi Shimbun file photo)

The government on Dec. 20 approved a budget proposal for fiscal 2020 worth 102.658 trillion yen ($939 billion), another record high fueled by surges in spending on social welfare and defense.

It was the eighth straight record amount for the budget proposal for the coming fiscal year and represents an increase of about 1.2 trillion yen over the initial fiscal 2019 budget proposal.

The budget proposal is forecasting a record amount of tax revenues, allowing for the 10th straight year of decrease in the volume of newly issued government bonds. Even with that achievement, government bonds will account for at least one-third of revenues for the budget.

But the government may have to take additional measures if, like in the current fiscal year, its rosy tax revenue forecast is not reached.

In the budget proposal for the current fiscal year, the government forecast a record level of tax revenues due largely from the increase in the consumption tax rate in October from 8 percent to 10 percent.

However, stagnant corporate performances caused in part by the trade war between the United States and China led to a shortfall in expected tax revenue, forcing the government last week to approve a supplementary budget and the issuing of 2.2 trillion yen in additional deficit-covering bonds.

The fiscal 2020 budget proposal includes a 5-percent increase in social welfare expenditures to a record 35.861 trillion yen.

The spending will cover the government’s free early education and day care services that started in October as well as a program to reduce the costs of higher education for children from lower-income families starting in April next year.

The budget proposal has restrained the margin of increase in medical and elderly care expenditures to 411.1 billion yen by decreasing the government-set price of prescribed drugs.

Without that decrease, the cost of medical and elderly care expenditures would have risen by 530 billion yen due to the graying of the population and increased use of advanced medical treatments.

Defense expenditures will also hit a record amount for the sixth straight year, reaching 5.313 trillion yen.

The greater amount will go toward heightening Japan’s defense capabilities in outer space and cyberspace, as well as to buy expensive hardware, such as the U.S.-made F-35B stealth fighter jet, and to develop the next-generation fighter jet to replace the F-2 now used by the Air Self-Defense Force.

Some of the items in the budget proposal were already announced as part of an economic measures package released earlier in December.

The first such package in three years included measures to prop up the economy after the consumption tax hike and to deal with a possible economic downturn after Tokyo hosts the 2020 Olympic and Paralympic Games.

Such special measures will account for 1.779 trillion yen in spending in the fiscal 2020 budget proposal.

An additional 1.143 trillion yen will be set aside for emergency spending to deal with typhoons and other natural disasters that devastated large parts of the nation this autumn.

In addition, 270.3 billion yen is being set aside for a program to reward consumers who make cashless payments at retail outlets. The program was instituted in line with the consumption tax rate hike and will continue until the end of June.

A record-high 35.1 billion yen is earmarked for sports-related spending in light of the hosting of the Olympics and Paralympic Games. About 10 billion yen is to be spent to help Japanese athletes improve their performances at the quadrennial event.