Statement by Prime Minister Junichiro Koizumi on the Guidelines for Formulation of the Fiscal 2002 Budget (Cabinet Decision) Responding to the Proposals of the Council on Economic and Fiscal Policy (CEFP)


December 4, 2001



Today, based on the proposal put forward by the Council on Economic and Fiscal Policy (CEFP), the Guidelines for Formulation of the Fiscal 2002 Budget were decided by the cabinet.

The fiscal 2002 budget will stand as the "budget committed to reform," and the newly formulated Guidelines for Formulation of the Budget will have a vital role to play in the revival of the Japanese economy.

Japanese economic, administrative and social systems that have up until now supported growth no longer function in the current environment. Through structural reform such as the final disposal of non-performing loans, regulatory reform, and the reform of special public institutions, it is necessary to create a society that will enable Japan to fully demonstrate its potential abilities and to restore a bright future for a stalled Japan with no apparent way out.

The budget for FY2002, as a part of these structural reforms, thus makes clear to proceed the fiscal structural reform. With the goal of "keeping new government bond issuance to below \ 30 trillion", the expenditure structure will be thoroughly revised and drastic qualitative improvements are aimed.

To this end, firstly, based on the principle of "assigning all that can be done by the private to the private sector, and assigning all that can be done by local governments to local governments," we will reduce needless expenditure and make thorough reductions to those expenditures that need to be reduced. In order to realize such a drastic qualitative improvement in expenditures, items for expenditure will be rigorously limited to these that truly contribute to the progress of Japan, based on a future-oriented position.

In addition, it is necessary to review all the systems that have perpetuated from the past, and to convert these to stable systems appropriate for changes in the social and economic structure. To this end, we have worked actively and courageously on challenges in all areas such as the development of social infrastructure, the social security system and local finances and have incorporated the outcome into the guidelines for formulation of the fiscal 2002 budget.

From now on, I will see to it that the cabinet will work together to formulate a budget for FY2002 that befits a "budget committed to reform."