Japan to focus on digital upgrade, disaster relief over debt

[TOKYO] Japan will focus on strengthening its digital infrastructure and natural disaster preparedness, while putting a key budget-balancing target on the back burner, according to annual strategic plans.

The government's "Digital New Deal" aims to upgrade an outdated public administrative system that has contributed to delays in delivering coronavirus relief measures such as cash handouts.

The plans, approved by Prime Minister Shinzo Abe and his ministers Friday, also state that the government will secure necessary budget funds to make the nation more resilient to natural disasters.

Recent heavy flooding in southern Japan has claimed scores of lives and shut down factories in Kyushu.

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Missing from the plans this year was the target of achieving a primary budget surplus by fiscal 2025, a sign that the government's priority for now is to support the economy with spending rather than to improve its fiscal health.

Economy Minister Yasutoshi Nishimura said it wasn't time to be worrying about the fiscal situation when the government needs to protect lives and jobs during the pandemic.

Finance Minister Taro Aso, speaking separately, said the government wasn't planning to change its budget surplus goal at this stage.

"We have balanced economic recovery with fiscal reform so far. That's not going to change," Mr Aso told reporters.

He added that he wasn't considering raising taxes for now as higher taxes would weigh on consumption.

BLOOMBERG