I’m sure Beijing and Seoul have already protested in the most petulant way with the direst warnings and hackneyed historical references, but this looks like American-style pork barrel with a nod to austerity.
The 4.75 trillion yen ($52.5 billion) in proposed defense spending, up 0.8 percent from last year, is the first such increase in 11 years and is partly aimed at beefing up Japan’s coastal and marine surveillance around islands also claimed by China and Taiwan.
“I think it’s a lean budget that Prime Minister Abe was aiming at,” Suga said. “We compiled the budget plan with a sense of urgency that there was not a single day to waste.”
Nearly half the budget for fiscal 2013, which begins April 1, will be financed by new government bonds. Japan will spend almost a quarter of it on servicing its national debt, which has ballooned to more than twice the size of its economy.
Social security spending will rise 10 percent to 29.12 trillion yen ($322 billion).
The government is earmarking 25 trillion yen ($276 billion) for fiscal 2011-2015 for reconstruction from the March 2011 earthquake and tsunami disasters that devastated Japan’s northeastern coast and brought on the worst nuclear accident since Chernobyl.
Outlays on public works will jump 15.6 percent to 5.3 trillion yen ($58.6 billion), following through on campaign promises to hike spending on public works such as the country’s aging roads and tunnels.
The Bank of Japan is betting against Abenomics.