Gov’t urged to curb spending: panel

November 30, 2017

Tokyo- A Finance Ministry advisory panel urged the Japanese government on Wednesday to curb expenditures in a bid to realize its fiscal reconstruction target of limiting annual growth in its policy spending to 530 billion yen.

The Fiscal System Council, which advises the finance minister, made the request in its proposal regarding the compilation of the government's budget for fiscal 2018, which starts next April.

The council said that overall medical fees should be lowered by at least 2.5 percent from current levels in order to curb growing social security costs.

After receiving the proposal, the Finance Ministry will start full-fledged work on drafting the fiscal 2018 budget.

Even if it meets the demands in the proposal, the government will need to issue a large amount of deficit-covering bonds to cover revenue shortfalls.

On a fiscal 2018 revision to medical fees, the council underlined the need to cut not only drug prices but also fees paid to doctors and pharmacists.

Government-administered medical fees are reviewed every two years.

The council also called on the government to lower standard fees for nursing care services.

In addition, it asked the government to set an upper limit for the use of public funds to finance a proposed free preschool education program, a key policy of the administration of Prime Minister Shinzo Abe.

The council expressed concerns over Japan's fiscal discipline, given that the government has effectively given up its goal of generating a primary budget surplus in fiscal 2020, due to its new policy of allocating more of the funds from the planned consumption tax hike in October 2019 to greater child care support. Jiji Press