The government plans to reduce the amount of bonds it issues by more than 2.2 trillion yen in fiscal 2006 to improve the nation's debt-ridden finances, Finance Minister Sadakazu Tanigaki said Wednesday.
Tanigaki also said the government will strive to reduce the size of its general-account expenditures in 2006 from the initial 47.28 trillion yen allotted for fiscal 2005, Tanigaki told reporters.
The proposed bond cut is bigger than the 2.2 trillion yen year-on-year reduction pledged for the current fiscal year through March, a move government officials say symbolizes the Koizumi administration's fiscal reform drive.
Koizumi said separately that he told Tanigaki the government will "strictly review spending and steadily implement fiscal reform plans."
Asked how much more of the bond issuance will be cut, Tanigaki said the government first needs to monitor developments in tax revenues and the overall economic situation before outlining specific levels.
Tanigaki said he told Koizumi the government must take drastic measures to reform the nation's medical system, a centerpiece of the fiscal structural reforms from the spending side.
The government in August announced a cap on general-account expenditures worth 47.54 trillion yen for fiscal 2006, which starts next April 1.
But the latest agreement between Koizumi and Tanigaki means the government will cap the so-called "ceiling" for main policy-related outlays below the current fiscal year's level.
The plans were approved when Tanigaki met with Prime Minister Junichiro Koizumi Wednesday evening to coordinate views on the fiscal 2006 budget, which is being compiled by the Finance Ministry.
Government ministries and agencies filed their budget requests Aug. 31.