A Democratic Party of Japan panel proposed Thursday using ¥2 trillion from within the planned spending cap of ¥71 trillion for fiscal 2011 for steps to spur economic growth and create jobs, a DPJ official said.
Arrangements are currently under way for Koichiro Gemba, head of the party's policy research council, to convey the proposal to the government, according to Koriki Jojima, deputy head of the council.
To secure the ¥2 trillion, Jojima said the DPJ will urge the government to make every effort to thoroughly review budgetary spending and rein in waste.
The ¥2 trillion will likely be channeled into measures to fight deflation, engineer economic growth, expand job opportunities and implement the policies that the DPJ promised during the Upper House election campaign.
On Tuesday, the Cabinet of Prime Minister Naoto Kan vowed to keep the main spending for the fiscal year that starts next April below the current year's ¥71 trillion, including grants to local governments but excluding debt-servicing costs.
The government was also considering asking ministries and agencies to reduce spending — excluding social security expenses — by 10 percent compared with fiscal 2010, but some Cabinet members and DPJ officials are against the fixed cutback, arguing that more flexible spending priorities should be set.
In addition to ¥2 trillion, the Kan government will need to secure another ¥1.3 trillion to cover expected natural increases in social security-related outlays for fiscal 2011.