Japan approves $926 billion budget: Can Shinzo Abe push fiscal reform?

Japan's parliament approved a record $926 billion state budget on Wednesday for the next fiscal year, starting on April 1, with analysts wary about Prime Minister Shinzo Abe's ability to push fiscal reform as he faces a crisis over suspected cronyism.

With the passage of the budget bills, attention is shifting to debate on a mid-year fiscal reform plan to rein in what is already the heaviest public debt burden in the industrialised world.

Analysts doubt Abe would push painful reform, at a time when he faces his biggest political crisis since taking office in late 2012 as suspicions swirl about a sale of state-owned land at a huge discount to a nationalist school operator with ties to his wife.

The 97.7 trillion yen ($925.89 billion) spending plan - above 97.5 trillion yen initially planned for the current fiscal year - features a large welfare outlay to respond to a fast-ageing population and a record military outlay to cope with regional tension related to China and North Korea.