Japan’s parliament Thursday passed a record 96.34 trillion yen ($803.45 billion) budget for fiscal 2015 which began April 1. The spending outlays are aimed at breathing new life into the country’s troubled economic recovery and fostering fiscal restructuring.
Defense spending surged to a record of 4.98 trillion yen, reflecting a continuing Japanese buildup in response to China’s growing military capabilities.
The budget’s approval had been delayed by a Dec. 14 general election called by Prime Minister Shinzo Abe to establish a public mandate that would delay a consumption tax hike until 2017. The increase was originally slated for 2015.
The House of Councillors approved the budget with support from the ruling camp led by Abe’s Liberal Democratic Party, following its passage through the House of Representatives on March 13.
Parliament had previously approved a short-term budget to guarantee that there were no interruptions in government spending before the full budget was passed.
The budget largely swelled on a jump in social welfare spending to a record 31.53 trillion yen due to the spiraling costs of caring for Japan’s fast-aging population.
Analysts said Abe’s government is under the gun to cut future spending given the fact that Japan’s public debt is more than twice the size of its $5 trillion economy. The burden is the heaviest among advanced countries.