Japan Sees Social Security, Defense Expenses Contribute to Record High Budget

The Yomiuri Shimbun

15:07 JST, April 8, 2026

Increases in social security and defense spending have contributed to a record ¥122.3 trillion budget for this fiscal year.

The Diet passed the fiscal 2026 budget proposal on Tuesday. It was the first time since 2015 for budget approval to be delayed until after the start of the new fiscal year. The government had compiled a provisional budget to serve as a stopgap, but the overall budget size will not change since the provisional budget will be fully absorbed into it.

Total expenditure increased by ¥7.1 trillion from the previous fiscal year. Social security costs reached a record ¥39.1 trillion, driven by such factors as upward revisions to medical fees. Defense spending also hit a new high of ¥9 trillion.

The budget includes funding for free high school tuition and free elementary school meals. Due to rising interest rates, spending on repaying the national debt and covering interest payments increased by ¥3 trillion.

Tax revenue was estimated at a record high ¥83.7 trillion, reflecting high prices and strong corporate performance.

New government bond issuance totaled ¥29.6 trillion, and represents a decreased reliance on public debt from the previous fiscal year. Even so, relying on new borrowing to cover budget shortfalls has become an established practice.

It was the first budget drafted under the administration of Prime Minister Sanae Takaichi. However, since the budget requests from ministries and agencies were submitted during Shigeru Ishiba’s administration, Takaichi-style budgeting will not be fully reflected until fiscal 2027.

“We will break away from budget formulation based on supplementary budgets and allocate the necessary funds in the initial budget,” Takaichi said. Hefty supplementary budgets have become the norm in recent years.

The government will consider multi-year fiscal support for 17 strategic fields, including artificial intelligence, semiconductors and shipbuilding, in an effort to help relevant companies plan ahead regarding domestic investment.