The government and the ruling bloc agreed Tuesday on a plan to cap general expenditures in the budget for fiscal 2010 at ¥52.67 trillion, an all-time high, Finance Minister Kaoru Yosano said.
The cap on outlays to implement policy measures for the year starting next April will increase about ¥5 trillion from the previous ceiling, or ¥1 trillion from general expenditures in this fiscal year’s initial budget, due primarily to rising social security payments.
The Cabinet is scheduled to endorse the spending cap Wednesday. It will serve as the basis for budgetary requests from ministries and agencies.
For fiscal 2010, Prime Minister Taro Aso’s administration has decided to abandon the key multiyear target of curbing natural increases in expenditures for social security by ¥220 billion annually, despite the deteriorating fiscal situation, Yosano said at a news conference.
Under the budgetary guidelines, the government will set up ¥350 billion in special reserves to fund top priority measures aimed at easing the impact of the downturn and shoring up the faltering economy.
Yosano claimed that except for the bigger outlays on social security and welfare programs, the government is sticking to the ongoing efforts to cut spending, such as in public construction and national defense.
Still, Yosano expressed concern about the government’s heavy reliance on issuing bonds to cover big spending.
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