Starting Thursday, officials from government ministries and agencies will line up in the hallway outside the Finance Ministry Budget Bureau to make their annual pitches for hunks of the 2006 general account budget.

Each year, the pie for public services shrinks.

This is partly because of the mammoth public debt, which will require 20.50 trillion yen in fiscal 2006 to redeem and pay interest on outstanding Japanese government bonds, up 2.05 trillion yen from this fiscal year’s initial budget.

That’s about a quarter of the projected fiscal 2006 budget going just to debt-servicing.

After tallying up all the requests, Japan is eyeing a general account budget of 85.27 trillion, yen up 3.08 trillion yen from the current fiscal year’s initial budget.

That extra 3 trillion yen will have to be cut when the budget is drafted in December, Prime Minister Junichiro Koizumi has indicated — presumably from the 47.54 trillion yen in general spending proposals submitted by the ministries and agencies. General expenditures are up 2.6 trillion yen from the initial budget for the current fiscal year.

Budget Bureau Director Hideto Fujii thus instructed his team Wednesday to cut costs, big and small.

“Do not forget common sense; do not forget the taxpayers,” he said. “And don’t forget to comb through those travel budgets, either.”

Charges of wasteful public spending have intensified as the government prepares to hike income and residential taxes — and possibly the consumption tax — to keep the country afloat. Japan’s long-term debt held by the central and local governments is expected to reach 774 trillion yen at the end of next March 2006.

Finance Ministry officials said the Sept. 11 election will not cause much uncertainty in drafting the budget.

Both the Liberal Democratic Party and the Democratic Party of Japan, the top two contenders, are advocating cost cuts and fiscal stringency, they said.

One concern, however, is the delay in personnel cuts.

Last year, the state said it would reduce national civil servants by 10 percent or more in five years from fiscal 2005.

But the ministries have said they are unable to make reductions until after the poll.

They say they cannot propose cuts to the ruling bloc committees, as they can’t gauge how much manpower will be needed until the outcome of the election is known.

Meanwhile, tax revenue grants for local governments are expected to total 16.85 trillion yen in fiscal 2006, up 760 billion, yen the Finance Ministry said.

Wanted by the ministries are funds for the following:

* To reverse a shrinking population, the Health, Labor and Welfare Ministry is asking for an additional 5.6 billion yen to give “rewards” of 1 million yen each to small firms that grant employees maternity or paternity leave for the first time in the next five years.

* To capture the hearts and minds of foreigners, especially Chinese, the Foreign Ministry is asking for 3.55 billion, yen up 80 percent from this year, for public relations campaigns and diplomacy to increase goodwill toward Japan worldwide.

* The Foreign Ministry also wants a 11.9 percent increase in money for official development assistance, to the tune of 546.3 billion yen.

That will help meet Koizumi’s pledge of increasing aid to fight disease in Africa to 13 billion, yen up 13 percent, the ministry said. It also would provide further disaster relief to tsunami victims in Sumatra and go toward the installation of preventive infrastructure against future disasters.

* The Ministry of Economy, Trade and Industry wants 145.1 billion yen to help small to medium-size firms, up 11.6 percent. This includes a new 9.6 billion yen project for small companies researching high-tech parts development.

It is further asking for increased funding to develop new oil and natural gas fields, including in Russia, and funds to research the natural gas field in the East China Sea.

METI wants a further 5 billion yen to purchase carbon dioxide emission credits from developing nations and firms.

* The Justice Ministry is requesting 5.35 billion yen for counseling for ex-cons and parolees.

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