The government has drawn up a 3.50 trillion yen ($28.6 billion) extra budget for the current fiscal year through March to fund policy measures to enhance welfare services and support farmers, government sources said Thursday.
The cabinet of Prime Minister Shinzo Abe is expected to approve the draft budget for fiscal 2015 on Friday before submitting it to the Diet next month.
The government will not issue any debt to form the supplementary budget, instead using tax revenues for the fiscal year, which are expected to top its projection partly due to robust corporate earnings, as well as unspent funds from the previous year’s budget.
To maintain fiscal discipline, the planned budget will be also used to reduce new debt issuance planned when the initial budget for the current fiscal year was compiled, the sources said.
Given the recent trend of lower interest rates that decreases debt-servicing costs for the government, the actual size of spending under the extra budget will be 3.32 trillion yen, the sources said.
The government earmarked 1.16 trillion yen for enhancing social security measures, including support for those raising children or caring for the elderly.
To help support the elderly with low pension payments, the government plans to provide 30,000 yen each, a measure that will cost 362.4 billion yen.
The government will also allocate 340.3 billion yen to fund projects aimed at improving the international competitiveness of Japanese farmers, in the wake of the Trans-Pacific Partnership free trade agreement recently reached by Japan and 11 other countries.
To accelerate reconstruction in areas devastated by the March 2011 earthquake and tsunami, the government set aside 821.5 billion yen, including additional spending for decontamination following the crisis at the Fukushima Daiichi nuclear power plant.