The nation's top economic panel on Tuesday adopted a report calling on the government to set a goal for cutting spiraling social security costs while hiking official development assistance to poor countries by 368.4 percent.
The economic and fiscal policy guideline for 2005 also recommends that the government set a goal for reducing the number of public servants and come up with budget reform options in pursuit of a smaller, more efficient government.
The Council on Economic and Fiscal Policy headed by Prime Minister Junichiro Koizumi recommends the government hike ODA from 0.19 percent of gross national income, to 0.7 percent, as the United Nations has urged industrialized countries to do.
Japan's GNI in 2003 was $4.376 trillion (about 472.6 trillion yen), according to the International Monetary Fund.
It also urged the government to consider expanding the number of unskilled foreign workers allowed into the country due to the decline in the working population that is being caused by the falling birthrate.
The inaction on social security spending represents a departure from the panel's original draft of the guideline, which had urged that medical spending be linked to macroeconomic indicators.
While the Finance Ministry originally sought to curb social security expenditures, the Health, Labor and Welfare Ministry insisted that medical spending not be cut in relation to economic growth, government sources said.