Requests from ministries and agencies for the fiscal 2013 budget have come to a record level topping ¥100 trillion, government officials said Friday, underscoring the difficulty of balancing economic stimulus and fiscal discipline.
The total, made up of general account spending as well as expenditures controlled under a separate account for reconstruction work following the March 2011 earthquake and tsunami, will top the current record of ¥98.47 trillion for this year.
The Finance Ministry will trim the requests and compile a draft initial budget worth more than ¥90 trillion by year's end.
Government offices have also submitted their requests for annual tax reform, including abolishing levies on vehicle purchases while upping tax breaks for home buyers, to boost the economy.
The budget compilation process has added importance this year with the consumption tax set to rise in 2014 and 2015, but the effort to improve the nation's fiscal health is likely to hit consumer and business spending.
The rise in requests is largely due to the government plan to fund projects to boost growth in sectors such as the environment, health and welfare, and farming, forestry and fisheries.
Requests in association with the "Japan revitalization strategy" will amount to around ¥2 trillion. The Health, Labor and Welfare Ministry will call for spending on innovation concerning drugs and medical equipment, while the Agriculture, Forestry and Fisheries Ministry will urge outlays to promote the use of renewable energy.
An increase in servicing costs for government bonds is also to blame for the huge budget.