TOKYO – Japan’s parliament has approved a record-high 92.6 trillion yen ($906.2 billion) budget for this fiscal year, raising military spending for the first time in 11 years and boosting public works outlays to help revive the economy.
The budget was approved late Wednesday after the lower house of parliament, whose decision takes precedence, overrode its rejection by the opposition-dominated upper house. The lower house, which passed the budget on April 16, is controlled by a coalition led by the ruling Liberal Democratic Party.
Prime Minister Shinzo Abe took office in late December and the change of administration delayed the process of drafting the budget, which is for the fiscal year that began April 1. A supplementary budget was enacted to bridge the gap until passage of the full-year budget.
Abe is counting on increased spending to help the economy break out of the doldrums and boost the LDP’s performance in upper house elections in July.
Nearly half of the annual budget is financed by government bonds, and Japan’s public debt is double the size of its economy. The government has promised to raise sales taxes to help reduce the debt and to carry out reforms to make the economy more resilient and competitive.