The Finance Ministry on Wednesday handed the Cabinet the fiscal 2007 draft budget, which, due to projected increased tax revenues, reflects the first spending rise in two years but also slashes the issuance of new government bonds.
The 82.9 trillion yen budget, the first one compiled since Prime Minister Shinzo Abe took office in September, reflects both a 4.0 percent increase from the initial 79.68 trillion yen budget for fiscal 2006 and growing social security costs.
Abe's Cabinet was able to cut new bond issuances -- a major feature of the fiscal 2007 budget -- by a record 4.5 trillion yen from the current year to 25.4 trillion yen thanks largely to the brisk economy, for which tax revenue is forecast to rise by 16.5 percent to 53.5 trillion yen.