Budget requests for next year reach record ¥96.5 trillion

Kyodo News

The Finance Ministry on Tuesday received the rest of the government’s final requests for next year’s budget, with rising debt-servicing and social security costs driving the total to a record high in excess of ¥96.5 trillion.

The amount compares with the ¥92.3 trillion in the initial budget for this fiscal year and the ¥95.04 trillion that was requested, both all-time highs.

The increase for next year comes partly on the back of an expected increase in debt-servicing costs projected to rise ¥3.48 trillion from the initial budget for this fiscal year to ¥24.13 trillion.

With spending on social welfare also expected to increase as the population gets older, the government will need to trim the expanded requests.

Finance Minister Yoshihiko Noda said his ministry will examine the requests for any signs of wasteful spending.

Trimming expenditures won’t be easy, however, with pressure mounting for stimulus measures to help the anemic economy.

The presidential election of the Democratic Party of Japan may also change the course of economic management, especially if Ichiro Ozawa, an advocate of big government spending, defeats Prime Minister Naoto Kan.

The Finance Ministry is expected to announce the outcome of the budget requests Wednesday.

The Health, Labor and Welfare Ministry made the largest request — ¥28.80 trillion — partly because of the increase in social security costs.

It was unclear whether the ministry plans to raise the current ¥13,000 monthly child allowance or provide relevant services rather than cash. Under budget request guidelines for this year, the government plans to keep general account spending, excluding debt-servicing costs, at around ¥71 trillion and the amount of new debt issues at ¥44 trillion.