Japan passed a 90.3 trillion yen ($1.1 trillion) budget on Thursday, with about half the spending expected to be financed by new bonds that will add to Japan's massive debt mountain.

Although the opposition-controlled upper house of parliament voted down the budget earlier in the day, it was still passed after a draft was approved last month in Japan's lower chamber.

"The budget bill was enacted, based on the constitution," a parliamentary official said.

Decisions by the powerful lower house have priority in case of conflict with the upper house and automatically become law 30 days after being sent to the upper chamber.

Local media have reported that spending for the 2012-2013 fiscal year may be Japan's highest ever, reaching more than 96 trillion yen when including extra public spending such as funds for rebuilding the nation's northeast after last year's earthquake and tsunami disaster.

About 49 percent of the budget would be financed by issuing new bonds, a plan fiercely contested by opposition lawmakers who are aiming to push Prime Minister Yoshihiko Noda to call snap elections, according to reports.

Noda's ruling coalition, however, still faces a tough task to push through separate legislation that would authorise the government to issue the bonds needed to pay for nearly half its planned spending.

The fresh bonds will aggravate Japan's massive public debt, which at about double its gross domestic product is the worst among industrialised nations.

Last week, Japan's cabinet approved a bill to double the nation's sales tax to 10.0 percent amid efforts to rein in the country's debt.

Noda, Japan's sixth premier in as many years, has warned that the future of the world's third-largest economy rests on tackling its public debt while financing an increasingly expensive social welfare system.

channelnewsasia.com