Cabinet endorses budget request guidelines

Japan's Cabinet has endorsed government guidelines for next fiscal year's budget requests that urge all ministries to cut spending by 10 percent from this year.

The guidelines endorsed on Tuesday call for capping next fiscal year's government spending, excluding debt-servicing costs, at about 816 billion dollars, and issuance of new bonds at about 505 billion dollars.

They also approve of a nearly 15-billion-dollar increase in social security costs, attributed to the aging of the country's population.

The amount of tax money allocated to local governments will be largely unchanged.

The across-the-board 10-percent spending cut will not apply to programs for free high school education, income compensation for farmers, and toll-free highways, all of which were promised by the ruling Democratic Party.

Money from the spending cut will be used to set up a special reserve worth more than 11 billion dollars to back policies spelled out in the government's growth strategy and the Democrats' manifesto.

Funds from the reserve will be allocated through a policy contest to be made open to the public, with the final decision up to the prime minister.

The budget compilation process will get into full swing when the deadline for ministries' budget requests expires on August 31st.

2010/07/27 19:26(JST)
(JST: UTC+9hrs.)