The government is stepping up its efforts to reduce the size of the state general-account budget in fiscal 2010 to less than ¥92 trillion, government officials said Thursday.
Amid a shortage of fiscal resources, the government is trying to trim at least ¥3 trillion worth of budgetary requests to meet the goal as the deadline for finishing the drafting process approaches.
The reduction of at least around ¥3 trillion is essential, considering that the three-month-old government led by the Democratic Party of Japan has recently restated its pledge to keep new government bond issuances below ¥44 trillion.
The Finance Ministry is expecting tax revenue in fiscal 2010 to remain stagnant at around ¥37 trillion amid the economic downturn, while the Cabinet is hoping to scrape together about ¥10 trillion from nontax receipts, including through tapping special account reserves.
General-account budgetary requests, submitted by ministries and agencies in October, reached a record ¥95.04 trillion, despite the DPJ's efforts to slash wasteful expenditures to come up with funds necessary for its key policies aimed at stimulating domestic demand.
There would be no need for the government to issue extra deficit-covering bonds if the targeted reduction is realized and tax revenue, as well as new government bond issuances, fall in line with its predictions, as the total sum will come to around ¥91 trillion.
The DPJ's request Wednesday to Prime Minister Yukio Hatoyama to review part of the party's key policies will give a significant boost to the ministry's policy of encouraging fiscal austerity, some of the officials said.