The Cabinet last week adopted the guideline for fiscal 2009 budgetary requests — at a time when tax revenues are expected to decline due to sluggish economic activities. This is a completely different picture from when the fiscal 2008 guideline was adopted. Therefore, budgetary negotiations will not go smoothly.
People are facing difficulties as the economy slows down in the wake of the subprime mortgage crisis in the United States. Prices for oil, food and other resources are soaring. Both ruling and opposition lawmakers are likely to call for more spending in view of people's plight and a possible Lower House election. Prime Minister Yasuo Fukuda should exhibit leadership in giving a clear orientation to the budget compilation under limited revenue sources.
Under the guideline, outlays for core policy-related outlays will be capped at ¥47.84 trillion, up about ¥560 billion from the ¥47.28 trillion in the initial fiscal 2008 budget. After budgetary negotiations with government ministries and agencies, the Finance Ministry will compile the fiscal 2009 general-account budget in late December.