Government ministries and agencies have submitted a record-high budget request of ¥96.75 trillion for fiscal 2011, topping by 1.8 percent the corresponding ¥95.04 trillion figure for fiscal 2010, which was also a record. Election pledges by the Democratic Party of Japan, automatic increases in social security costs, and debt-servicing costs have bloated the budget requests.
The government will have difficulty trimming these requests as it drafts the fiscal 2011 budget. The initial fiscal 2010 budget was slashed to ¥92.3 trillion, and still amounted to a record. If former DPJ Secretary General Ichiro Ozawa beats Prime Minister Naoto Kan in the party's presidential election and becomes prime minister, there will be more pressure to expand the budget because he appears to favor big spending.
The Kan Cabinet imposed a fixed 10 percent cut in policy-related spending across all ministries in order to earmark slightly more than ¥1 trillion as a "special fund to restore vitality to Japan." Money in this fund is intended for areas believed to contribute to economic growth. Budget requests calling for use of this money totaled ¥2.94 trillion. It is regrettable that some of these requests have nothing to do with the purposes of the special fund.