“In securing funding for birthrate policies, we must not damage the economy or reduce incomes for young people or those raising children,” Kishida said. “By reforming spending and making the maximum use of the existing budget, we will aim not to create any additional real burden.”

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He added the government would issue bonds to make up initial shortfalls in funding.

“We’ll mull the specifics of fiscal reforms towards the end of the year,” Suzuki said. He added that a new framework would be created to secure stable funding, without going into details.

“If you think about an election that may be held, this is not the time to be talking aloud about who will bear how much of a burden,” said Masato Koike, economist at Sompo Institute Plus.

The prime minister has also put off a decision on how to fund a pledged 60 per cent increase in defence spending over the next five years, as polls show voters struggling with rising prices are largely opposed to tax increases to fund the new policies.

Bloomberg

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