TOKYO , Dec. 19 (UPI) -- Japanese Prime Minister Yasuo Fukuda government's first budget Thursday proposed spending $738.2 billion in fiscal 2008, up 0.2 percent from the previous year.
More money will go for revitalizing regional economies and for improved education and better medical services, while there will be spending cuts for public works projects, defense spending and foreign aid, the financial ministry's draft budget said.
Kyodo news service said higher social security costs and local tax grants also contributed to the budget increase.
There will be $417.5 billion for general expenditures in the new year starting next April, up 0.7 percent from last year.
Tax grants to local governments will go up 4.6 percent to $138 billion, the report said.
Government bond issuance will be trimmed for the fourth straight year, down 0.3 percent to $223.8 billion.
The deficit in Japan's primary balance, which is annual tax revenues less outlays other than debt-servicing, was projected to expand for the first time in five years to $45.7 billion from $39.11 billion last year.
Public works spending will be cut 3.1 percent $59.51 billion and defense spending will be down 0.5 percent to $42.2 billion. Foreign aid will be cut 4 percent to $6.18 billion.
