The fiscal 2007 draft budget, the first one compiled under the administration of Prime Minister Shinzo Abe, reduces the amount of new debt, lifting hopes for the nation's financial reconstruction. But the reduction is mainly due to lucky circumstances -- not because of strenuous efforts to cut spending. The government must continue striving to reduce the issuance of government bonds in coming years.

The general account of 82.9 trillion yen represents a 4 percent increase from the initial budget for fiscal 2006. But the government was able to reduce the amount of government bond issuance by 4.54 trillion yen to 25.43 trillion yen. The record reduction fulfills a goal of Mr. Abe. Thus new bond issues will account for 30.7 percent of the general account, down from 37.6 percent in fiscal 2006. Still, the government must continue to rely on a large amount of bond debt to compile a budget.

The government also managed to reduce the deficit in the primary balance -- tax revenues plus revenues from other sources (excluding bond issues) minus expenditures (except debt-service costs). The deficit stands at 4.43 trillion yen, down from the 11.21 trillion yen deficit in the initial fiscal 2006 budget.