The Cabinet plans to approve both an initial budget for fiscal 2017 and an extra budget for the current fiscal year on Dec. 22, Finance Minister Taro Aso said Friday.
An initial state budget is often approved by the Cabinet on Christmas Eve every year. However, this year the schedule was brought forward, apparently in consideration of Prime Minister Shinzo Abe's planned trip to Pearl Harbor in Hawaii from Dec. 26.
"We are working to compile an extra budget for fiscal 2016 as it is highly likely that we will need funds for disaster relief" following powerful typhoons, Aso told a news conference.
The government is seeking to rein in year-on-year growth in social security costs by reducing an initial budget request of ¥640 billion to around ¥500 billion in the fiscal 2017 budget.
Curbing ballooning social security costs will be a challenge in the quickly graying society.
Tax revenue for the fiscal year ending next March is expected to fall short of the government's initial estimate, hurt by the yen's growing strength, which weighs on corporate tax revenue.
However, Aso said it is still difficult to make a projection.