Japan Cabinet Approves ¥13 Tril. Extra Draft Budget for Fiscal 2023

The Yomiuri Shimbun
Prime Minister Fumio Kishida attends a Cabinet meeting in Tokyo on Friday.

The Cabinet has approved a ¥13 trillion supplementary draft budget for fiscal 2023, which ends in March, mostly to finance a new stimulus package.

Of the total ¥13.199 trillion general expenditure budget, ¥13.127 trillion will be used to cover economic stimulus measures.

The additional budget is less than half of last fiscal year’s ¥28.9 trillion but is much higher compared to the average pre-pandemic budgets of about ¥3 trillion.

About 70% of the revenue will be financed by government bonds due to sluggish tax revenue growth.

Of the spending, the government will allocate ¥3.438 trillion to promote domestic investment and ¥2.736 trillion to combat high prices through such measures as providing benefits for low-income earners.

The government plans to earmark ¥1.039 trillion for the Defense Build-Up Funds to secure financial resources for enhancing defense capabilities.

Tax revenues for the current fiscal year are slightly higher than the original estimate, so the government will allocate ¥171 billion in increased tax revenues.

The revenue will fall far short, even if the fixed expenditures are reduced and non-tax revenues are added — for example, by using a reserve fund, which was intended for COVID-19 countermeasures, for fiscal 2023.

The government will compensate for this shortfall by issuing ¥8.875 trillion in additional construction bonds and deficit-covering bonds.

Combined with the initial fiscal 2023 budget — the largest ever at ¥114.381 trillion — the supplementary budget will bring total spending for the general account to ¥127.58 trillion.

The proposed supplementary budget is scheduled to be submitted to the Diet on Nov. 20 and is expected to be passed by the end of the month.