Prime Minister Junichiro Koizumi's Council on Economic and Fiscal Policy will unveil a new policy blueprint later this month calling on the government to focus on information technology and the aging of society in the fiscal 2003 budget, sources said Tuesday.
The panel will also propose that more funds be earmarked for programs to increase the nation's birthrate, rejuvenate urban communities and build a society that can better cope with environmental problems, the sources said.
The package will seek an overhaul of the national pension system in fiscal 2004, saying it would be inevitable to raise contribution payments.
The council is expected to present the package to Koizumi on June 21 so that the government can formalize it in time for the June 26-27 summit of the Group of Eight nations in Kananaskis, Alberta.
As a means to curb social security-related spending, the plan will propose that payments of pension benefits, which are set at certain levels, be linked to price fluctuations.
The package will list various steps to cut government expenditures, including cutbacks in official development aid, improved efficiency in defense spending and a reduction of government subsidies.
The package will also urge the government to immediately explore ways to curtail salaries paid to public workers by reviewing the current system under which the National Personnel Authority annually proposes pay raises for public employees.
The economic council has already decided to propose a corporate tax cut while studying a proposal on a "pro forma standard" system, a new corporate tax levied on the basis of criteria not linked to profits, such as the number of employees and capitalization.
The council will also propose the creation of special zones where regulations will be drastically eased to promote structural reforms.
The government plans to establish a secretariat to promote the plan, the sources said.