Japan approves largest-ever budget
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The government of the Democratic Party of Japan (DPJ) approved a record 92.3 trillion yen (1 trillion dollars) budget for fiscal 2010 on Friday, meeting a self- imposed target to resolve the issue before the end of the year.
"I would like to call it 'the budget to protect people's lives', " said Prime Minister Yukio Hatoyama at a news conference in Tokyo, saying that while all promises outlined in its manifesto were not met, his party had done its best.
The budget was cut from an initial figure of 95.04 trillion yen (1 trillion dollars) at the request of the cabinet.
The budget will receive funding from new debt issuance and nontax forms of revenue after economic conditions left the DPJ with a projected 37.4 trillion yen (409 billion dollars) in tax, the lowest amount in 25 years.
The DPJ had initially aimed to reduce the budget to 88.5 trillion yen (967 billion dollars) as a part of a manifesto promise made before an election in the summer to eliminate wasteful spending and make the nation run in a "vastly more efficient" manner.
The size of the budget is likely to cause concern about the future for a nation that already has one of the largest per-capita debts in the world.
Some 44.3 trillion yen (484 billion dollars) in new bonds were issued in order to make sure the budget can be implemented, meaning that Prime Minister Yukio Hatoyama in effect has managed to stick to his pledge to keep bond issuance below 44 trillion yen.
The DPJ came to power in September promising to transfer public spending away from huge public-works projects and into the hands of the people on the street in an effort to stimulate domestic demand in an export-driven nation. To fund this, the DPJ set up a committee to eliminate wasteful spending and raise funds for what it saw as more worthwhile projects, but the shortfall in tax revenue has meant more money than initially planned has had to be spent.
Within the budget, in line with the DPJ campaign pledge to "put people's lives first," social welfare spending has been increased by 9.8 percent to 27.27 trillion yen (298 billion dollars). In order to meet its promise to see more equality between urban and rural areas, the DPJ allocated an additional 909.4 billion yen (10 billion dollars) to local governments, upping funding to 17.48 trillion yen (191 billion dollars).
Meanwhile, public-works projects were hard hit by the first- ever DPJ budget, seeing spending cut by a record 18.3 percent to 5. 77 trillion yen (63 billion dollars).
The budget will likely be approved by lawmakers early next year, with the DPJ and its coalition partners controlling both the upper and lower houses of parliament.
