Japan expects spending to reach an all-time high of 97.7 trillion yen ($867 billion) in the nation's fiscal 2018 budget, though a projected increase in tax revenue signals an improved primary balance, NIKKEI reports.
The cabinet intends to make final adjustments to the spending plan Monday and give its stamp of approval Dec. 22.
General expenditures are seen rising to 58.9 trillion yen, covering social security, public works, defense, education and the like. Social security looks poised to claim much of the increase and consume over 30% of the spending plan, climbing 500 billion yen above the budgeted figure for fiscal 2017 due to higher medical and nursing costs.
The cost of national debt service clocks in around 23.3 trillion yen, about 200 billion yen less than in this fiscal year's budget thanks to falling interest rates.
Japan aims to distribute about 15.5 trillion yen in tax revenue to its regional governments, down from around 15.6 trillion yen in the fiscal 2017 budget, though negotiations between the Finance and Internal Affairs ministries continue.
The nation's full general-account budget -- combining general expenditures, debt service and payments to regional governments -- would rise about 300 billion yen, marking a record for the sixth straight year.
Getting in shape
On the income side, the government anticipates around 59.1 trillion yen in tax revenue, up about 1.4 trillion yen and the most in 27 years. Income tax revenue is expected to soar as brisk corporate earnings support higher stock dividend payments. Revenue outside of taxes, such as payments from the Bank of Japan, is poised to decline by around 400 billion yen to 4.9 trillion yen.
To close the budget gap, Japan will issue around 33.7 trillion yen in government bonds, down about 700 billion yen and the least in nine years. The government has already reduced new bond floats for the past five fiscal years as it pursues fiscally responsible economic growth.
Japan's primary budget balance -- the gap between revenue and expenditures other than debt service -- looks to improve from a deficit of around 10.9 trillion yen for fiscal 2017 to a 10.4 trillion yen deficit next fiscal year.