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Japanese government budget requests for next year hit record ¥102.8 trillion

JIJI

Overall general-account budget requests by government ministries and agencies for fiscal 2019 have hit a record high of ¥102.8 trillion, the Finance Ministry said Friday.

The actual total of budget requests for the year is certain to grow further. Government spending on measures to alleviate negative effects on the domestic economy of next October’s planned consumption tax hike will be considered separately.

The ministry is eyeing tougher scrutiny of budget requests compared to normal years in order to maintain fiscal discipline.

Requests exceeded ¥100 trillion for the fifth consecutive year.

The previous record of ¥102.4 trillion was posted for fiscal 2016. The ministry curbed the requests to set the initial budget size for the year at ¥96.7 trillion.

But there is a good chance that the fiscal 2019 initial budget will top ¥100 trillion for the first time, as the size of the envisaged economic measures is likely to exceed ¥1 trillion, people familiar with the matter said.

Among government bodies, the Health, Labor and Welfare Ministry requested ¥31.9 trillion, following an increase in social security expenditures amid the country’s aging population.

The Defense Ministry requested ¥5.3 trillion against the backdrop of the persistent North Korean missile threat.

The two ministries’ budget requests both rewrote record highs, pushing up the total.

The government’s policy of promoting economic growth and human resources development helped increase the overall amount sought, drawing more than ¥4.3 trillion in requests for related programs.

Meanwhile, the combined requests for the zaito fiscal investment and loan program dropped 12.9 percent from the initial plan for the previous fiscal year to 12.6 trillion, the lowest level in the past 20 years, due to declining demand for the program amid the country’s economic recovery.

At a Fiscal System Council subcommittee meeting Friday, Finance Minister Taro Aso asked members to “tackle spending reform with a sense of crisis.”

Many participants called for an increase in fiscal consolidation efforts to secure funds to cope with frequently occurring natural disasters and prepare in the event of a financial crisis, according to former Internal Affairs Minister Hiroya Masuda, who serves as acting chairman of the subcommittee.