Government adopts ¥28.9 trillion draft extra budget

Jiji Press

17:23 JST, November 9, 2022

TOKYO (Jiji Press) — The government Tuesday approved a draft fiscal 2022 second supplementary budget with general account spending of ¥28,922.2 billion to finance a comprehensive economic package for combating soaring prices.

A total of ¥29,086.1 billion will be secured for the economic package, adopted late last month, under the second extra budget when other relevant expenditures are taken into account.

While existing budgetary allocations will be trimmed by over ¥1 trillion, the new budget would boost the government’s overall spending in the year through next March to ¥139,219.6 billion.

The government plans to submit the draft extra budget to the current Diet session set to end on Dec. 10.

While expecting its tax revenue to rise ¥3,124 billion from its previous forecast, the government plans to issue ¥22,852 billion in additional government bonds to help finance the economic package.

The government will issue ¥20,376 billion in deficit-covering bonds and ¥2,476 billion in construction bonds.

The economic package features programs to fight surging prices including higher electricity and gas fees as well as measures to support wage increases.

The package also calls for reviving regional economies by taking advantage of the yen’s current weakening and accelerating efforts to realize a new form of capitalism, a signature policy of Prime Minister Fumio Kishida.

Specifically, the government will spend over ¥6 trillion to help curb rising electricity, gas and gasoline costs amid soaring energy prices triggered by Russia’s invasion of Ukraine.

Of the amount, ¥3.1 trillion will be used to lower electricity and gas rates. Standard households will see their monthly electricity and gas bills curbed by ¥2,800 and ¥900, respectively, from as early as next January to August. The margins will be halved from September.

An additional ¥3 trillion will be secured for an extension of a subsidy program to push down retail gasoline prices.

The economic package also includes programs to support the tourism industry amid a recovery in foreign visitors to Japan, strengthen supply chains for liquefied natural gas and other vital goods and give fresh assistance for childbirth and child-rearing.

In fiscal 2022, the government’s tax revenue is now projected to reach a record ¥68,359 billion, topping the previous year’s ¥67,037.9 billion.

Due to the surge in spending, the amount of new government bond to be issued in the year is estimated to jump to ¥62,478.9 billion from ¥39,626.9 billion projected under the first supplementary budget.

To its reserve funds, the government will allocate ¥4.74 trillion, including ¥1 trillion for new emergency economic measures to deal with the negative effects of the war in Ukraine.