The Cabinet on Tuesday approved a plan to cap budget requests for fiscal 2012 and keep total general account spending — excluding debt-servicing costs — to less than ¥71 trillion, while allocating about ¥700 billion for special policy measures to boost economic growth.
The guidelines ask all ministries to cut policy spending requests by 10 percent in the next fiscal year. However, they don't apply to obligatory outlays, such as government payroll costs, tax revenue transfers to local governments, and social security costs.
The money saved from the 10 percent cuts would mainly be used to cover anticipated increases in social security spending, the Finance Ministry said.