Japanese premier Shinzo Abe pledged on Monday he would not keep stimulus spending “forever” in a policy speech ahead of a budget that will raise more in taxes than it does from borrowing.
Abe’s plan to overturn four years in which the majority of money the government spends is raised from selling bonds came as an opinion poll showed he has enjoyed a boost in popularity since coming to power last month.
The policy speech comes after his government announced a $226.5 billion stimulus package earlier this month, raising concerns over the level of Japan’s already-towering public debt.
In his first policy speech since taking office in December, Abe repeated his “three arrows” of economy policy: aggressive monetary easing, flexible fiscal spending and a growth strategy that would induce private investment.
Japan’s budget for fiscal 2013 starting April will likely stand at 92.61 trillion yen ($1.05 trillion), with revenue estimated at 43.10 trillion yen and new bond issuance at 42.85 trillion yen — the first time in four years revenue surpasses new bond issuance, major newspapers reported Monday.
Under the budget plan, spending on defence will increase by 40 billion yen, the first rise in 11 years, which comes against the backdrop of a lingering territorial row with China over the sovereignty of a chain of islands in the East China Sea.
A survey published Monday by the business daily Nikkei showed public support for Abe rose by six percentage points to 68 percent from late last month, just days after Abe’s cabinet was launched.
As well as broad approval of economic management measures, the survey showed a majority of voters liked Abe’s response to the Algerian hostage crisis in which 10 Japanese people died.
Abe returned home early from a foreign trip to deal with the crisis, which also saw his government call in the Algerian ambassador to demand answers on the armed response, which many in Japan criticised as hasty.