The Japanese government approved Saturday a budget bill for fiscal 2006, featuring a spending-cut across a wide range of sectors which sent the general accounts below 80 trillion yen (684 billion US dollars) for the first time in eight years.

Japan curtailed its defense budget by 0.9 percent to 4,813.9 billion yen (41.1 billion dollars), but boosted the spending for a joint project with the United States on a advanced missile interceptor.

The general account totals 79,686 billion yen (681.1 billion dollars), down 3.0 percent from the initial budget for the current fiscal year.

Under the budget, the general expenditure will be cut by 1.9 percent to 46,366 billion yen (396.3 billion dollars), down for the second consecutive year.

The government plans to gradually halt a seven-year-old income tax cut policy in the following two fiscal years, which is expected to increase the tax revenues by 4.3 percent.

Among the defense outlays, the government earmarked more than 3 billion yen (25.6 million dollars) for developing the next- generation missile defense system in collaboration with the United States.

Japanese Chief Cabinet Secretary Shinzo Abe said that the missile defense system is the only means for Japan to guard its people against ballistic missile attacks, and in line with the nation's defense-only policy.

To develop such a weapon system is a sensitive issue for the World War II invader in consideration of its pacifist constitution.

Abe also said Japan will be cautious in the project, putting under strict supervision the supply of parts to the United States.

The spending cuts and estimated higher tax revenues enable government to reduce the issue of bonds by 12.8 percent to 29,973 billion yen (2.2 billion dollars).

The outlays for social security went up 0.9 percent showing growing burdens resulted from aging population.

The bill will be submitted to the parliament for approval in January.

Source: Xinhua