The Cabinet on Friday approved a 46.8 trillion yen cap on core policy-related outlays in the fiscal 2007 budget, down from 47.5 trillion yen in the fiscal 2006 budget request guidelines and the lowest level in nine years.
But the cap is up from the 46.4 trillion yen in general expenditures in the initial fiscal 2006 budget, suggesting the Finance Ministry will seek further cuts in the upcoming budget compilation process as part of efforts to rein in Japan's debt-ridden finances.
With the "ceiling" set, government ministries and agencies will use it as a reference in drawing up their budgetary requests for fiscal 2007, which begins next April. The Finance Ministry will take requests by the end of August and use them to draft the next fiscal year's budget, which it plans to release in December.