The government has no plans at present to draft a supplementary budget for fiscal 2002, Chief Cabinet Secretary Yasuo Fukuda said Tuesday.

"At present, we are not considering (an extra budget), although I cannot say we will never do so," the government's top spokesman told a regular news conference.

Fukuda added that leaders of the ruling Liberal Democratic Party, New Komeito and the New Conservative Party will meet in September to discuss financial and economic issues, indicating the ruling bloc will determine whether to draw up an extra budget at the meeting.

The comments come amid growing calls from ruling coalition lawmakers for additional fiscal steps to shore up the economy.

After a Monday meeting of coalition leaders, New Komeito head Takenori Kanzaki said he proposed during the gathering that a supplementary budget be drafted for the current fiscal year.

Fukuda meanwhile said guidelines for ministries' budgetary requests for the next fiscal year will be set at a Cabinet meeting Aug. 7.

Ministries and agencies will use the guidelines when they submit their budgetary requests to the Finance Ministry by the end of August.

At a separate news conference, Finance Minister Masajuro Shiokawa said his ministry plans to submit a proposal that will form the basis for discussions on the budget request guidelines at Friday's meeting of the Council of Economy and Fiscal Policy.

At the same time, Shiokawa suggested that the government may have to consider issuing government bonds beyond its self-imposed 30 trillion yen limit because tax revenues are likely to decline considerably in the next fiscal year.

"We expect a considerable shortage of revenues (for fiscal 2003)," Shiokawa said. "I think we should give special consideration to the issue of the 30 trillion yen (pledge)."

In June, the government elected to keep the issue of government bonds around 30 trillion yen in fiscal 2003 as part of its fiscal reform efforts.

Tax-cut size at issue

The size of a tax cut proposed by Prime Minister Junichiro Koizumi should be decided by the end of this year, economics minister Heizo Takenaka said Tuesday.

"It is better to take time to discuss this matter when we consider the step's consistency with macroeconomic conditions and the nature of the tax cut," the state minister in charge of economic and fiscal policy said. "It is not a matter that can be decided in just a few days, because there are conflicting opinions on the policy."

On Friday, Koizumi proposed slashing taxes by more than 1 trillion yen in fiscal 2003 in a bid to resuscitate the nation's faltering economy.

Koizumi's proposal came at a meeting of the Council on Economic and Fiscal Policy, after private-sector members of the panel called for a 1 trillion yen tax cut in the next fiscal year.

The government is considering providing tax breaks to manufacturers for capital outlays on new factories and equipment to help bolster the economy, according to government officials.

But Takenaka opposed this idea, saying, "Providing tax breaks for capital investments would not benefit companies in the service industry."

He said it would be in keeping with the spirit of stimulating the economy to "reduce the corporate tax rate without specifying measures at which tax cuts are directed."