Japan Budget Policy to Include 44-T.-Yen Debt Cap

Tokyo, Dec. 14 (Jiji Press)--The Japanese government's fiscal 2011
budget policy will call for limiting new debt issuance to 44 trillion yen
for the year starting in April, Jiji Press learned on Tuesday.
The amount of new debt issuance in the fiscal 2011 initial budget
will not exceed the level of the previous year's initial budget, according
to a draft of the government's budget policy.
The government aims to adopt the policy as early as Thursday.
The draft calls on the government to check progress made under its
medium- and long-term fiscal reconstruction plan early in 2011 and devise a
new medium-term plan by mid-2011.
The new plan will include outlines of budgets between fiscal 2012
and fiscal 2014, according to the draft. The current plan was adopted in
June.
The new plan may include a pledge to speed up fiscal reform efforts
if necessary, the draft says, hinting at further belt tightening.
The current plan seeks to limit general-account spending excluding
debt-servicing costs to 71 trillion yen while curbing annual new debt
issuance to 44 trillion yen.
As for the fiscal 2011 budget, the draft confirms the spending and
debt caps.
The draft calls for maintaining the government's share in total
basic public pension premium revenue at 50 pct.
The government will consider a one-off step to procure 2.5 trillion
yen in financial resources needed to achieve the goal.
On a proposed increase in child benefits for kids under 3 years
old, the draft says the government will consider increasing the monthly
allowance by 7,000 yen per head as a main option while looking for permanent
financial resources that would enable the increase.
The draft also says the government will discuss social security
reform measures together with drastic tax system changes so that it can
reach a conclusion by mid-2011.