The Japanese government plans to set its fiscal 2016 general-account budget at a level around ¥96.8 trillion, informed sources told Jiji Press on Friday.
By curbing growth in social security-related costs, the government aims to limit the size of the total budget increase from the fiscal 2015 initial budget at about 0.5 percent in a bid to highlight its resolve to restore the country’s fiscal health, the sources said.
The government initially considered setting the general-account budget at about ¥97 trillion.
In fiscal 2016, which starts next April, tax revenue is seen topping ¥57.6 trillion, its highest level since fiscal 1991, thanks to growth in income and corporate tax revenue, the sources said.
New government bond issues, excluding refinancing bonds, will decline for the fourth straight year and will be set at a level slightly below ¥35 trillion, the sources said.
For social security spending, which will account for about one-third of total expenditures, the increase is now seen totaling nearly ¥500 billion, a level targeted by the Finance Ministry but smaller than the ¥670 billion in budget requests submitted earlier this year, the sources said.
This is because the government is mulling cutting medical fees for the first time in eight years in its fiscal 2016 biennial review.
On Monday, Health, Labor and Welfare Minister Yasuhisa Shiozaki and Finance Minister Taro Aso will hold last-minute talks on social security-related spending in order to make a decision.
Social security costs are ballooning due to an aging society, and how to curb spending in the sector is a key to the budget compilation work.
The government is set to adopt its fiscal 2016 budget plan at a cabinet meeting on Thursday.