The National Personnel Authority recommended Thursday that the Diet and Cabinet introduce a 2.03 percent cut in monthly wages for national government employees for the current fiscal year.

It is the first time for the authority to recommend a wage cut since the current pay recommendation system started in 1948. The move is aimed at keeping salaries in line with the shrinking wages in the private sector, but critics fear this could fuel a vicious cycle.

The panel has recommended that national civil servants receive annual wages lower than they did in the past fiscal year, as the rate cut was above the 1.66 percent regular wage hike.

The government is expected to follow through on the recommendation as many government officials and members of the ruling coalition have been calling for bureaucrat salary cuts in a bid to reduce fiscal spending.

The personnel authority wants core salaries, bonuses and performance-based pay subject to cuts. Bonuses and performance pay have been subject to cuts since 1999.

The bonuses and performance-based pay of national government employees would be reduced to 4.65 months from the current 4.7 months. The cut in total annual salary would average about 150,000 yen.

The core salary would decrease by 2 percent for administrative positions and by 2.1 percent for senior positions, while spousal allowances would be reduced by 2,000 yen to 14,000 yen.

The Finance Ministry said the reduction would cut government costs by 241 billion yen.

It is considered a certainty that any cut in national bureaucrats' pay will also lead to salary reductions for local government employees.

If local civil servant pay is reduced in line with the recommendation, local governments would save a combined 452 billion yen.

The authority said it will set up a study group to review the wages of national government employees assigned to local governments and local bureaus, because their wages appear much too high compared with those of private-sector employees.