(Provisional Translation)

Prime Minister Koizumi's Comments following the Cabinet Approval of the
FY2002 Guidelines for Budget Requests

August 10, 2001

Today, the guidelines for budget requests were approved by the cabinet, and the formulation process for the FY2002 budget has commenced.
The budget for the coming fiscal year will be formulated based on the "Structural Reform of the Japanese Economy: Basic Policies for Macroeconomic Management"(June 26th, cabinet decision), which shows the direction as to where the Koizumi reforms are heading to, and the "Reform Schedule" which materializes the processes shown within. Since the budget is formed to materialize the government's policies, it is only proper that such processes are implemented. However, in order to actually create a budget that reflects the policies, methods such as the following will be required in addition to the decision of a reform schedule".

(Eliminate hindrances due to sectionalism, for an integrated budget request)
Since our government is a huge organization, occurrence of hindrances due to sectionalism is difficult to avoid. By eliminating these hindrances, the government as a whole, must efficiently progress with implementing key policies. Consequently, as for the key 7 programs, we have decided to first ask each ministry to make earnest and creative suggestions, and then have cabinet organizations such as the Council on Economic and Fiscal Policy, Council for Science and Technology Policy, IT Strategy Headquarters, Urban Rejuvenation Headquarters, and Headquarters for Industrial Structural Reform and Employment Measures center an examination process, to finally have the ministries submit comprehensively integrated requests.

(Transparency of the budget formulation process and resolute measures towards key issues)
Ultimately, the budget is financed by tax revenues. Therefore, it is the government's duty to explain to the citizens of Japan, who are the taxpayers, how and for what kind of measures expenditures are being planned. From now on as well, explanations will be made along the course of the budget formulation process.
In particular, correspondence towards difficult issues such as the reform of special public corporations, etc., earmarking of road revenuesAand reform of the medical system, and the situation dealing with the issue of local allocation tax issues based on the idea that "whatever that may be accomplished by the local government should be accomplished by the local government", will be tackled under my leadership, while clearly defining the essence of the matter to the citizens of Japan, with the cooperation of related ministers and the Council on Economic and Fiscal Policy.

(Radical "qualitative improvement" of expenditures)
We have targeted the amount of government bond issuance for the FY2002 budget to be less than 30 trillion yen. However, this should not be a target to just reduce expenditures. As a "budget for resolute reforms", expenditures should be limited to those measures which are truly in need for government works in both national and local government levels, and radical "qualitative improvements" should simultaneously be made to increase the vitality of the Japanese economy. Therefore, in formulating the budget, the idea is of such to reduce 5 trillion yen, and on the other hand, redistribute 2 trillion yen to prioritized areas.
Today, I have directed each of the ministers to thoroughly examine details of each program. I will also seriously examine each of the programs with the cooperation of the Minister of Finance.

(Closing comments)
The keywords for the FY2002 budget requests are "less than 30 trillion, minus 5 trillion, and plus 2 trillion". The Koizumi Cabinet as a whole is eager to formulate a budget worthy to be called a "budget for resolute reforms", by drastically reducing allocations towards expenditures that should be reduced, while radically allocating expenditures to areas where necessary. I am sure to face various difficulties while breaking past experiences, but I would like to ask for the mere understanding and support of the Japanese people, in order to materialize the reforms of the Koizumi Cabinet.