Cabinet ministers agreed Thursday on key spending cuts for the next fiscal year, paving the way for the Finance Ministry to release its blueprint for the fiscal 2004 budget.
The budget for the next fiscal year is expected to total some 82.1 trillion yen.
Among other things, Finance Minister Sadakazu Tanigaki and the six ministers agreed to reduce tax grants for local governments and to cut pension payments, according to Finance Ministry officials.
Tanigaki and Taro Aso, minister of public management, home affairs, posts and telecommunications, agreed to reduce local government tax grants to 16.5 trillion yen from the 17.4 trillion yen allocated in fiscal 2003, according to the officials.
The tax grants are given to local governments to cover costs that cannot be financed via the localities' own revenues.
In a separate meeting, Tanigaki agreed to a request by Chikara Sakaguchi, minister of health, labor and welfare, to cut the public pension payments by 0.2 percent to 0.4 percent in fiscal 2004, reflecting the fall in consumer prices for this year, the officials said.