Cabinet approves 2008 draft budget

The Japanese government has approved a draft budget for the next fiscal year, beginning in April, at a Cabinet meeting on Monday.

The draft budget of 83.06 trillion yen, or about 728 billion US dollars, is the 2nd largest ever. It's 0.2 percent more than the initial budget for the current fiscal year and would be a 2nd consecutive annual increase.

The draft calls for spending 47.28 trillion yen, or about 414 billion dollars, up 0.7 percent, to implement policy programs.

Spending for increased social security costs due to an aging society rises by 3 percent and expenditures for education and encouraging scientific development will be up a half-percent.

Spending for public works projects and official aid to developing countries will decrease -- by 3.1 percent and 4 percent respectively, while spending for national defense will increase a half-percentage point.

The allocation of tax revenues to local governments would increase 4.6 percent. Debt-servicing costs would be down 4 percent to 20.16 trillion yen, or about 176 billion dollars.

The government expects tax revenues of 53.55 trillion yen, or 469 billion dollars, up 0.2 percent from fiscal 2007.

The issuance of deficit-covering bonds would be 25.34 trillion yen, or about 222 billion dollars, down 0.3 percent. This is 4th consecutive annual decline in new issuance of government bonds. But 30 percent of annual expenditures would still depend on bond issuance.

The balance of government bonds is to increase more than 6 trillion yen, or about 52 billion dollars, and top 553 trillion yen, or about 4.8 trillion dollars.

The government will submit the draft budget to Parliament for its approval in January.