TOKYO, Dec. 21 – Japan’s cabinet has approved a draft budget for fiscal 2020 on December 20, 2019. The general account budget for the next fiscal year starting in April topped 100 trillion for the second straight year and hit a record high of 102.66 trillion yen. Social security costs swelled due to the rise in medical expenses, while the medical cost is growing because of the aging population and the introduction of free preschool education program after the consumption tax hike. The budget also includes agricultural spending of 2.31 trillion yen, which is up 10 billion yen compared to fiscal 2019. It exceeded previous year’s expenditure for the second consecutive year.
The government will submit the draft to a regular Diet session in January with a goal of adopting it by March, the end of the current fiscal year. The total amount of the general accounts increased 1.2% (1.2 trillion yen) from the initial general account budget for fiscal 2019. Social security and defense expenditures hit the highest.
The main factor for the budget rise was swelling social security expenditure, which accounts for one-third of the general account. For the free preschool education program introduced after the tax rise in October last year, Abe’s Cabinet is going to need 341 billion yen. To support students paying enrollment and tuition fees for higher education, the government will pay 488.2 billion yen starting next April. As a result, the total social security expenditure rose by 5.1% to 35.86 trillion yen.
Measures to boost consumer spending after the tax hike will cost 1.78 trillion yen.
Agriculture, forestry and fisheries-related expenditure is 2.31 trillion yen. The government secured 4.5 billion yen in total for the creation of a system to strengthen export capacity. The plan includes setting up a new organization as an export controller within the government, speeding up export procedures, and improving facilities so that they meet the Hazard Analysis Critical Control Point (HACCP) requirements.
The cabinet secured a total of 1.5 billion yen for “Smart Agriculture Comprehensive Promotion Project,” a scheme to promote the introduction of advanced technologies at production sites.
The budget for fiscal 2020 will also include 3 billion yen for measures to increase the number of wagyu beef and dairy cattle.
The government also allocated 100 million yen to support the variety registration and the acquisition of agricultural patents and trademarks overseas, and another 100 million yen to assist efforts to reduce food loss.