Just as the government's work to compile the fiscal 2017 budget gets into full swing, the Abe administration is reportedly planning to put together a third extra budget for the current year, featuring hundreds of billions of yen in additional spending, including for upgrades to the missile defense system. The administration's basic policy, adopted this week, for next year's budget calls for a "thorough review of all expenditures without sanctuary." But under Prime Minister Shinzo Abe's watch, supplementary budgets compiled one after another on the grounds of providing economic stimulus have become constant loopholes that allow more government spending.

Since Abe returned to power in 2012, his administration has relied on a series of supplementary budgets. As a result, the size of the annual budget — while kept in the range of ¥90 trillion to ¥96 trillion in the initial stage — has expanded every year to around ¥100 trillion as a result of the extra spending. The level of expenditures boosted in response to economic crises and major disasters have not come down to previous levels even after the problems have been addressed. To make good on the nation's pledge for fiscal rehabilitation, a mechanism should be considered to prevent the government from easily resorting to extra budgets except in response to severe economic shocks or major natural disasters.

The government's fiscal 2017 budget policy emphasizes the role of fiscal spending, along with the Bank of Japan's massive monetary stimulus, to shore up the economy. Toward the end of the year, the Finance Ministry plans to scrutinize the budgetary requests filed by ministries and agencies. However, it appears inevitable that the size of the general account budget for the year starting next April will hit a record ¥97 trillion, due mainly to the continuing expansion of social welfare expenses.