Japan likely to compile budget guidelines late next week

(For more stories on the Japanese economy, click [ID:nECONJP])

TOKYO, Dec 3 (BestGrowthStock) – Japan’s National Strategy Bureau is
likely to compile guidelines for next fiscal year’s budget by
late next week or early the following week, a government
official said on Friday, as politicians race to meet a year-end
deadline.

The guidelines are likely to offer more details on how the
Democratic Party-led government will fund its welfare
programmes, cut wasteful spending and direct funds to potential
growth areas, but the Democrats are still thrashing out many of
the details.

The plan from the National Strategy Bureau, which is charged
with coordinating fiscal policy, is also likely to reaffirm an
earlier agreement to limit bond issuance for fiscal 2011/12 at
44 trillion yen ($525 billion), matching the current fiscal
year’s budget.

Any sign the government will miss its debt target or its
Dec. 24 deadline could damage its credibility. Prime Minister
Naoto Kan’s government has already seen a sharp fall in public
support due to a gaffe-prone cabinet. [ID:nPOLJP]

Missing the deadline would also cast doubt on the
government’s ability to lower its debt burden, the largest among
industrialised nations.

“I think we would have to compile something by the end of
next week or early the following week to stay on schedule,”
Tatsuo Hirano, a vice minister of the National Strategy Bureau,
told reporters after cabinet members met to discuss the budget.

“We will continue to discuss and decide on our policies.”

The government has agreed to expand benefits for people
raising children but is still juggling proposals to fund the
increased spending.

The Democrats also need to agree details for income grants
to the agriculture sector, funding for healthcare and its tax
policy for the fiscal year starting from April 1.
[ID:nTOE6AO06N]

Public finances are very much in the spotlight after
spiraling costs from Ireland’s bailout of its banking sector
forced it to tap rescue funds from the European Union and the
International Monetary Fund.

Japan’s Ministry of Finance usually prepares a draft budget
late in December and sends it to the cabinet for approval. The
government sends budget bills to parliament in January so they
can come into force by the start of fiscal year on April 1.
(Reporting by Stanley White; Editing by Chris Gallagher)

Japan likely to compile budget guidelines late next week