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27th Meeting of the Council on Economic and Fiscal Policy in 2006
Prime Minister Shinzo Abe held a meeting of the Council on Economic and Fiscal Policy at the Prime Minister's Official Residence. At the meeting, the Basic Principles of FY2007 Budget Formulation were reported to Prime Minister Abe. The report incorporates the principles of systematically carrying out expenditure reform, centered on social security services, public investment and local government finances, while maintaining economic growth. It also includes a basic approach to the restoration of fiscal health. The issuance of new government bonds, for example, will be capped at a level far below that of the current fiscal year. The report also introduces prioritized items that the government will efficiently promote to achieve creativity and growth, including policies to "construct an open economy full of vitality" through enhancement of growth based on international competitiveness, IT and regional revitalization, and through support for people to challenge again; and to "realize a healthy and safe society" by building a social security system that is easy to understand as well as compassionate and reliable and through the creation of a child-raising friendly society. In receiving the report Prime Minister Abe said, "I will proceed with the budget formulation process based on this report. I will firmly maintain a reform-minded stance and will formulate the budget based on the principle of 'building a society in Japan which is filled with vitality and opportunity,' one of the basic principles of the Abe Cabinet." During the debate on the related topic of tax revenues earmarked for road projects, Prime Minister Abe said, "I will carry out a reform of tax revenues earmarked for road projects that will benefit the people of Japan. As the aging of the population continues, I will consider ways to effectively utilize limited financial resources and reduce the people's burden. From this perspective, even tax revenues earmarked for road projects are not absolutely untouchable. While maintaining the current tax rate, I will carry out a review of tax revenues earmarked for road projects, including the gasoline tax, and advance reforms keeping the interests of the people in mind at all times." The Cabinet decided on these basic principles in its meeting on December 1 and the Prime Minister issued a statement the same day.
Related link: Statement by Prime Minister Shinzo Abe on the Basic Principles of the FY2007 Budget Formulation (Cabinet Decision) in Response to the Report by the Council on Economic and Fiscal Policy (CEFP)
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