Japan Press Weekly

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2014 August 13 - 19 [POLITICS]

Abe outlines further cuts in welfare budget next year

The next year’s national budget which Prime Minister Abe Shinzo’s Cabinet envisages is likely to entail further cuts in social welfare services and an increase in preferential treatment for large corporations, such as corporation tax reductions and more public works projects.

The government compiles its annual budget based on budgetary requests from all ministries. Prior to the submission of the requests, the Cabinet establishes a basic policy on the budget for the next fiscal year, called guidelines for ministries’ requests of budget allocations. Based on this policy, each ministry makes its budget request by the end of August.

The Abe Cabinet on July 25 approved the guidelines for the budget request for FY 2015.

In the guidelines, the government stated that corporate tax rates will be reduced in the next fiscal year through utilization of tax revenue gains made from the implementation of the so-called Abenomics and other economic policies. It also indicated that it will put further importance on the use of tax money for the promotion of Abe’s new growth strategy which includes enhancement of corporate competitiveness.

On the other hand, regarding budget allocations for pension and health-care services, the guidelines state that an increase in welfare expenditure should be carefully scrutinized and that maximum efforts should be made for a rational and cost effective use of the welfare budget.

In the medical service area, the guidelines require each prefecture to set a target ceiling for medical expenditure. Regarding the social protection budget, the guidelines point out that welfare benefit payments should be decreased if possible. As for the pension program, the guidelines incorporate continuation of the macro-economic sliding scale policy, which contributed to lowering pension benefits, and the possibility of an increase in the eligibility age.