The government's key policy-setting panel released a general outline Tuesday for the nation's core fiscal 2005 budget that aims at keeping general outlays "effectively" below levels seen this year.
The term "effectively" highlights a tug-of-war continued between some members of the Council on Economic and Fiscal Policy trying to put a dint in growing public debt and the Health, Labor and Welfare Ministry pointing to growing social security and welfare costs of a rapidly aging society.
Pension payouts and medical costs alone will account for an additional 1 trillion yen of expenditures in the next fiscal year, the health ministry has said.
Finance Ministry officials said they would consider allocating 750 billion yen to 800 billion yen in additional funds to the nation's burgeoning social security and welfare costs, but not 1 trillion yen.
This would mean general, policy-related expenditures will slightly exceed 48 trillion yen, up from the 47.63 trillion yen in the fiscal 2004 budget.
With the term "effectively," however, the Finance Ministry wants to satisfy those calling for more fiscal belt-tightening.
Ministry officials said the term means the size of policy-related spending in the next budget will be actually smaller than the current one, without the inevitable increases in social security spending taken into account.
To offset what it calls "natural increases" in social security spending, the ministry plans to slash more in other areas, mainly in public works allocations.
On Tuesday, it was Finance Minister Sadakazu Tanigaki who seemed to be toeing the middle line.
"We will do what we can do" for fiscal reform, Tanigaki told a news conference earlier in the day. "But we must also allow inevitable social security and other cost increases."