By JUNICHI KAMIYAMA/ Staff Writer
September 1, 2023 at 16:05 JST
The Finance Ministry building in Tokyo's Kasumigaseki district (Asahi Shimbun file photo)
Government ministries have requested a record 114 trillion yen ($784 billion) in the budget for fiscal 2024, but the figure will likely expand further by trillions of yen.
The total now is about 4 trillion yen more than the initial budgetary requests for the current fiscal year, due mainly to record requests for social security and defense spending.
However, a number of ministries have continued the practice of pushing policy programs without specifying monetary amounts in their budget requests.
This practice was widely used in efforts to deal with the novel coronavirus pandemic. Ministries at that time had no idea how much money would be needed to carry out the programs.
For fiscal 2024, many requested programs without specific monetary figures fall under an “unprecedented” framework approved by the government in June to reverse the falling birthrate.
The framework calls for raising child allowances and expanding scholarship programs, among other items. The specific amounts will be decided on during the budget compilation process that will continue until the end of the year.
That means several trillion yen could be added to the initial budget proposal when it is approved by the government in late December.
As things stand now, social security spending will consume about a third of all government expenditures.
The health ministry is seeking 33.727 trillion yen, an increase of 586.6 billion yen over the initial fiscal 2023 budget, to cover the expected rise in medical and elderly care costs stemming from the graying of the population.
Prime Minister Fumio Kishida’s administration in 2022 also approved a five-year defense spending program totaling about 43 trillion yen, a 1.5-fold increase over past levels.
Fiscal 2024 will be the second year of the spending program, and the Defense Ministry is requesting 7.738 trillion yen, 1.138 trillion yen more than the current fiscal year’s initial budget.
A total of 28.142 trillion yen, up by 1.153 trillion yen, was requested to repay government bonds and make interest payments.
The larger amount stems from the expected rise in long-term interest rates from 1.1 percent of the current fiscal year to 1.5 percent because of a monetary policy correction by the Bank of Japan.
A special budget allocation program of about 4.2 trillion yen has been set up to fulfill Kishida’s pledge to bring about a “new capitalism.”
Requests being made under that program include measures to promote digital transformation in local regions and support efforts by companies to raise worker salaries.
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