A full-scale discussion on the budget for 2020 was launched on Thursday by a panel of the Council on the Fiscal Framework.
The new fiscal year’s budget construction, beginning in April next year, is the first one of its kind ever since the Reiwa period began on 1 May in conjunction with the Imperial succession.
Governmental ministries and agencies have reported 105 trillion yen in budget requests, and economic measures are expected to be addressed separately after an increase in consumption tax of 8 to 10 percent on Tuesday.
The focus of the discussions at the Subcommittee advising the Minister of Finance is on whether concrete proposals could be made to reduce the rising social security expenses.
Finance Minister Taro Aso said during a subcommittee meeting Thursday that his ministry wants to develop a good budget that suits the new era, including the introduction of total spending reform, to find the balance between economic recovery and fiscal reconstruction.
In fiscal 2025, the government plans to direct the central government’s primary budget balance into the red. The cabinet bureau, however, forecasts that, even if the country continues to achieve high economic growth on the grounds of tax increase, the primary budget balance will remain in the net in fiscal 2012.
The Finance Ministry provided documents at Thursday’s meeting to explain this figure and illustrated the challenge of fiscal reform.
The Government launched in September a committee for consultations on improving pensions and the medical system, ostensibly to develop a generation-wide social security system.
The committee cannot force measures to reduce the increase in social security costs arising from the aging population. This remains uncertain.
The Council of the Fiscal System will address budgets in the areas of social security and agriculture, forestry and the fisheries industry.
It plans to make several recommendations by the end of November, to incorporate them in the government’s draft budget, which will be drawn up by the end of the year.