The government ministries and agencies have made budget requests for fiscal 2012 that total a record ¥99 trillion, exceeding the fiscal 2011 initial budget of ¥96.746 trillion. Because the government has used up surplus funds to compile the third supplementary budget for fiscal 2011 for the reconstruction from the March 11 earthquake, tsunami and crisis at the Fukushima No. 1 nuclear power plant, the government will have difficulty in making ends meet.
Under the middle-term framework for the budget from fiscal 2012 to fiscal 2014, expenditures excepting debt service cost must be held down to ¥71 trillion for fiscal 2012, the same as the fiscal 2011 initial budget. The bond issuance for fiscal 2012 is also to be limited to ¥44 trillion, the same as in fiscal 2011.
The ministries and agencies were asked to reduce their policy-related budget requests by 10 percent from the fiscal 2011 initial budget. But since Prime Minister Yoshihiko Noda has removed the ceiling for budget requests related to the reconstruction from the triple disasters, such requests have swollen to ¥3.5 trillion.