Hatoyama's Government Approves Budget 2010

The Japanese government Friday approved a budget plan for the next fiscal year that contains a record Y92.299 trillion in spending measures, the total package pushed up by planned outlays on the new administration's signature private-demand boosting measures.

Prime Minister Yukio Hatoyama's three-month-old government hopes the budget's inclusion of steps such as allowances for families raising children and free public high school education will help boost its popularity going into an Upper House election next summer.

"I believe that we have delivered all we can without compromising fiscal discipline," Hatoyama said at a news conference.

The budget plan comes as the Hatoyama Cabinet's public approval rating slides below 50% in recent polls on the public's perception that the prime minister is indecisive on key policy matters. Prosecutors' indictment Thursday of two former secretaries of Hatoyama over a political fund scandal could also hurt the leader's popularity. And the public also appears worried about a sluggish economy, which the government hopes to support with fiscal spending steps in the budget, The Wall Street Journal reports.

Japanese Prime Minister Yukio Hatoyama said on Friday that despite the country's severe finances, the government is sticking to its stance of holding off on a sales tax hike at least for the next four years.

"Japan's financial condition is very severe. But we definitely won't raise the consumption tax rate for the next four years," Hatoyama told a news conference.

Japan approved on Friday a record draft budget for next year that will inflate the country's already huge debt by about $484 billion. The government is trying to support an economy emerging from recession but still plagued by deflation, Reuters reports.

The new government, which vowed to reorient spending to households is spending more on welfare and and education but cuting public works spending by a record 18.3 percent, a traditional way for Japanese governments to boost the economy.

The following breakdown shows initial budget figures for the coming fiscal year and the current year ending next March.

The initial budget may not be the final say. If the economy worsens again the government could announce extra budgets -- of which it has presented two this year, Reuters reports.

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