Thanks to the consumption tax hike in October, the government coffers will see an infusion of funds next fiscal year. But since the government plans a record amount of spending, it will still have to borrow money and the mounting debts will continue to rise. At least that is how the draft budget for fiscal 2020, adopted by the Cabinet on Friday, appears at first glance.
The size of the draft budget is a whopping ¥102.66 trillion and marks the eighth straight year of increase. It is also the second consecutive year that the ¥100 trillion mark will be surpassed.
One of the main reasons for all this spending is the rising cost of social security. About 35 percent of the government's general expenditures, or ¥35.86 trillion, will be spent on social welfare. The proposed sum represents a 5.1 percent increase from fiscal 2019, a more substantial hike than the 3. 2 percent jump earmarked in the initial fiscal 2018 budget. Though Finance Minister Taro Aso labeled the current draft as a budget that achieves "both economic regeneration and fiscal consolidation," it is hard to foresee Japan's fiscal health improving in the near future.
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