An advisory panel to the finance minister recommended Monday that the government take steps to curb swelling social security-related spending by setting targets when compiling the budget for next year.
The recommendation, presented by the Fiscal System Council to Finance Minister Sadakazu Tanigaki, called for drastic spending cuts across the board, such as by limiting the rate of increase in medical and other social security expenditures to the growth rate of the economy.
The council also proposed slashing salaries for local government employees, which critics say are too high, and setting a target for reducing the number of central government officials in a bid to slim down the bureaucracy.
The set of proposals is aimed at fixing the nation's debt-ridden finances, warning that the fiscal deficit -- expected to total 538 trillion yen as of next March 31 -- represent the biggest risk to the nation given its rapidly aging population.