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FY19 budget request guidelines adopted, with eye on flexibility

Jiji PressTOKYO (Jiji Press) — The government, at a Cabinet meeting on Tuesday, approved budget request guidelines for fiscal 2019.

Under the guidelines, the government is expected to set a special spending quota of some ¥4.3 trillion to ¥4.4 trillion for measures to promote economic growth and human resources development, up about 10 percent from the previous year.

In accordance with the guidelines, government ministries and agencies are set to submit their budget requests for the year from next April to the Ministry of Finance by the end of August.

The guidelines call for a 10 percent cut in discretionary spending, including public work expenditures, which often increase or decrease by policy decisions, from the ¥14.7 trillion for fiscal 2018. They also request that compulsory spending, such as personnel costs, should be reduced as much as possible from the ¥12.7 trillion for fiscal 2018.

Three times the amounts of the spending cuts through these initiatives will be set aside for the special quota.

The government expects social security costs, including pension benefit payments and medical expenditures, to increase by ¥600 billion due to the aging population. Budget requests within the estimated costs will be accepted.

The government stopped short of setting a numerical reduction target for the expected increase in social security costs for fiscal 2019, after seeking to curb the growth to some ¥500 billion annually.

The budget request guidelines postponed at least until the autumn a decision on the scope of economic measures aimed at cushioning the impact of the planned consumption tax increase in October 2019 from 8 percent to 10 percent, saying discussions will be carried out in the process of budget compilation.

The guidelines, which are believed to allow more flexibility in budget requests than in the past, are drawing concerns over whether they will play their primary role of preventing an upward pressure in expenditures.Speech

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