The Japanese government has for the first time in two years raised its national budget, with rising costs of the social security system cited as one of the reasons, according to Deutsche Presse Agentur dpa. The government on Sunday approved the 82.9 trillion yen budget (700 billion dollars) which is to take effect at the beginning of the new fiscal year on April 1, 2007. The budget represents an increase of more than 4 per cent on the previous year and is the largest budget since fiscal year 2000. The first budget of the recently elected government of Prime Minister Shinzo Abe provides 21.1 trillion yen for social security, 2.8 per cent more than estimated for the current fiscal year. The increase was attributed to growing expenses for medical services and pensions due to Japan's ageing population. Growing tax receipts and expenditure reduction in almost every area meant that government loans to finance the new budget would fall by 15.2 per cent to 25.4 trillion yen. However, Japan, the world's second largest economy, remains among the most indebted of the industrialized countries, with debts of 148.1 per cent of gross domestic product expected for the coming fiscal year. Japan's defence budget will be reduced for the fifth year, dropping 0.3 per cent to 4.8 trillion yen. The Asian country will strengthen its investment in missile defence due to the threat posed by North Korea, but this will be accomplished by savings in other areas.
