Tokyo: Japan approved its biggest ever budget, as an improving economy and a sales tax hike in made room for more defence spending and the first step towards achieving a balanced budget.
Prime Minister Shinzo Abe's cabinet rubber-stamped a plan that will see the government spend 95.88 trillion yen ($922 billion) in the year from April 2014, up from 92.61 trillion yen the previous year.
The figure is the largest in Japan's history due to changes in accounting rules and a sales tax hike, which will rise from five per cent to eight on April 1.
The lion's share of the extra revenue is ear-marked for spending on snow-balling medical fees and other social welfare costs.
The government's official policy is that Japan's primary balance should be in surplus by 2020, although most analysts expect that target to be missed.
The bulk of the increase reflects salary hikes, with just 0.8 per cent set aside for new fighter jets, drones and a new amphibious unit.
Until last year, Japan's military budget had been shrinking for a decade, in contrast with China's, which has seen double digit rises most years over the same period.
But that did not stop Beijing lashing out at the plans when they were announced last week, with a spokesman saying they “must cause concern to neighboring countries in Asia”.