In Brief : Japan OKs $491.8-Billion Budget
The Japanese Cabinet approved a $491.8-billion budget for fiscal 1989 today that holds defense spending to less than 1% of the gross national product and makes Japan the world’s top donor of foreign aid.
Japan’s booming economy has increased tax revenue, allowing the government to boost spending by 6.6% in 1989, the highest budget increase in seven years.
The strong economy puts Japan in the enviable position of being able to cut taxes, increase social and defense spending and reduce the growth in deficit spending.
“I have a feeling that Japan’s fiscal reconstruction has finally gone into orbit,” said Finance Minister Tatsuo Murayama.
The draft budget, written by the Finance Ministry, will be hotly debated by other ministries competing for funds and must win final approval from the Diet, or parliament, but no significant changes are expected.
According to the draft, defense spending will increase 5.2% to $31.6 billion in fiscal 1989, which begins April 1.
Despite the increase, Japan’s defense spending will remain below 1% of the GNP, a level that has been criticized by the United States as too low.