Japan's Cabinet Approves Austere 2013 Budget Guidelines
Fri Aug 17, 2012 7:37PM
In Japan, the Cabinet of Prime Minister Yoshihiko Noda has approved preliminary guidelines for Japan's 2013 budget, which call for all Ministries to exercise fiscal discipline to rein in the nation's ballooning public debt. Japan's Cabinet has passed new guidelines for the government's 2013 budget, amounting to 71 trillion yen, capped at the same amount as this year. The government is pushing for fiscal austerity, calling on all Ministries and agencies to cut public works and discretionary spending by 10 percent. With its debt to GDP ratio at 200%, fiscal discipline also means that new borrowing will be capped at 44 trillion yen before the government will get some relief when sales tax hikes begin in 2014. While these budget guidelines stress the need to boost Japan's economy, some say the world's third largest economy has been in a good position. Cuts in public works will make room for social security spending and a one trillion yen growth strategy that includes development of alternative and renewable energy projects. Even with these guidelines approved, and the Ministries set to submit their budget requests in September, nothing is set in stone. Prime Minister Noda is under increasing pressure to call an election, in which case the entire budget process will start from the beginning.