• Kyodo


The Cabinet approved guidelines Friday for drafting the fiscal 2013 budget, emphasizing financing for an economic growth strategy and the development of renewable energy resources.

The guidelines also stress that the government will maintain fiscal discipline, maintaining the current fiscal year’s ¥71 trillion cap on major policy spending and ¥44 trillion limit for new debt issuance.

The Finance Ministry requires other government offices to submit their budgetary requests by Sept. 7. It will then draw up a draft budget likely to total between ¥90 trillion and ¥95 trillion in late December, before the government submits it to the Diet early next year.

But Prime Minister Yoshihiko Noda’s recent announcement that he may call a snap election “soon” has cast uncertainty over this time frame. A change of government would result in the process having to be restarted from scratch.

The fiscal 2013 budget will primarily focus on financing the government’s growth strategy, allowing ministries and agencies to seek a total of ¥2 trillion to ¥4 trillion in areas related to the environment, medical and health industries, as well as the agriculture, forestry and fisheries sectors.

Additional funding can be requested depending on how much government offices cut other spending.

One of the budget’s priorities is to fund the exploitation of wind, solar and other renewable energies to reduce Japan’s reliance on nuclear power.

After assessing the requests, the ministry will earmark ¥1 trillion to ¥2 trillion for the growth strategy.

To secure the needed funds, every ministry and agency will be required to reduce general policy spending by up to 10 percent, excluding personnel and other administrative costs, but no upper limit has been set for postdisaster reconstruction work in the northeast.

Limiting major policy spending to ¥71 trillion is intended to signal the government’s continued efforts to improve Japan’s fiscal health, the worst among major developed countries, amid soaring welfare expenditures.

On social security, the government will approve additional spending of about ¥840 billion compared with fiscal 2012, when some ¥26.4 trillion was initially set aside, due to the growing ranks of seniors and retirees. At the same time, reforms to streamline welfare services will continue.

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