Top > What's up around the Prime Minister > December, 2005

The 28th Meeting of the Council on Economic and Fiscal Policy Tuesday, December 6, 2005 JAPANESE The 28th Meeting of the Council on Economic and Fiscal Policy was held at the Prime Minister's Official Residence. At the meeting, "Basic Principles of FY2006 Budget Formulation" was submitted to Prime Minister Junichiro Koizumi. The report stated that "The Japanese economy is expected to make steady progress to overcome deflation." In regards to the FY2006 budget, the report described that "The government will continue to promote the reform package of the three issues on subsidy, tax sources and local allocation tax. The structural reforms including the reform of the total personnel cost, the medical system, the special account, asset and debt, and policy finance will also be reflected in the budget one after the other. Furthermore, the government will thoroughly review overall expenditures and decrease the level of general expenditure to below the level of the previous fiscal year. The government also intends to strictly control the general account expenditure. Moreover, the government will greatly reduce the issuance of new government bonds compared to the amount in FY2005 (34.4 trillion yen) in light of the current economic situation and taxation trends, and as much as possible aim to limit new bond issuance to the 30 trillion yen mark." In his opening remarks, Prime Minister Koizumi said, "I have received the Basic Principles of FY2006 Budget Formulation. This will be the last budget formulation under the Koizumi Cabinet. The budget formulation must be commensurate with the Reform Continuation Cabinet." The Cabinet decision on the Guidelines was made at the extraordinary Cabinet meeting that followed this meeting. In his statement that was released on the Cabinet decision, Prime Minister Koizumi stated, "I expect that the Cabinet will work together in unity for the formulation of the FY2006 budget that is commensurate with the Reform Continuation Cabinet."