Japan's fiscal 2006/07 budget
TOKYO, March 27 (Reuters) Japan's parliament enacted a 79.69 trillion yen (7.4 billion) budget on Monday for the fiscal year starting on April 1, including plans to trim spending and new debt issuance in an effort to tackle massive state debt.
Following are a summary and table.
BUDGET SIZE -- The 2006/07 initial budget totals 79.69 trillion yen, down 3.0 percent from this year's initial budget of 82.18 trillion yen. It is the first time in four years that the size of the initial budget has been smaller than the previous year's and the first time since 1998/99 it has been less than 80 trillion yen.
-- General spending falls to 46.37 trillion yen, down 1.9 percent from 47.28 trillion yen this year, the second straight year of decline.
-- Most of the rest goes to debt servicing costs of 18.76 trillion yen and regional spending totalling 14.56 trillion yen.
The Finance Ministry assumed a 2 percent yield on 10-year Japanese government bonds in calculating debt servicing costs.
-- Tax revenues are estimated at 45.88 trillion yen, up from this year's forecast of 44.01 trillion yen. This year's figure is expected to be revised up to around 47 trillion yen due to higher than-expected corporate profits. Tax revenues are recovering thanks to an economic upturn but are still short of the more than 50 trillion yen seen annually in the 1990s.
-- The general account budget on official development assistance for poor countries is cut by 3.4 percent from this year to 759.7 billion yen.-- Defence-related spending is cut by 0.9 percent to 4.81 trillion yen. Spending to support the presence of U.S. forces in Japan falls 7.4 percent to 215.1 billion yen.
-- Social welfare costs rise 0.9 percent to 20.57 trillion yen despite government efforts to reform the nation's medical care system to make patients to pay more.
BOND ISSUANCE -- Fresh issuance of Japanese government bonds is planned at 29.97 trillion yen, down 12.8 percent from the initial 34.39 trillion yen issuance earmarked for this year, the largest drop from year-ago levels on record.
-- It is also the first time in five years the government has kept the figure below 30 trillion yen.
-- Japan will rely on bonds for 37.6 percent of its overall budget in fiscal 2006/07, down from 41.8 percent this year.
-- Japan's outstanding public debt, including that held by central and local governments, is expected to rise to 775 trillion yen at the end of fiscal 2006/07, roughly 151 percent of the nation's gross domestic product.
-- The key fiscal consolidation target is to move the primary balance -- revenues and spending excluding debt issuance and servicing -- into surplus by the early 2010s. The balance will be in deficit by 11.2 trillion yen in fiscal 2006/07, improving from a 16 trillion yen deficit this fiscal year.
-- A special account that holds foreign currency assets acquired through intervention, called the Foreign Exchange Fund Special Account (FEFSA), will continue transferring surplus funds to the general account. For next fiscal year, 1.62 trillion yen will be transferred from the FEFSA to help support the revenue of the general account budget, up from 1.42 trillion yen this fiscal year.
BUDGET BREAKDOWN Initial budgets for fiscal 2005/06 and 2006/07 (in billion yen, with percentage changes in parentheses): FY06/07 FY05/06 Change TOTAL 79,686.0 82,182.9 (-3.0) REVENUES Tax and stamp revenues 45,878.0 44,007.0 (+4.3) Non-tax revenues 3,835.0 3,785.9 (+1.3) Government bonds 29,973.0 34,390.0 (-12.8) SPENDING General Expenditures 46,366.0 47,282.9 (-1.9) Social security 20,573.9 20,380.8 (+0.9) Public works 7,201.5 7,531.0 (-4.4) Defence 4,813.9 4,856.4 (-0.9) ODA 759.7 786.2 (-3.4) Government debt servicing 18,761.6 18,442.2 (+1.7) Tax grants to local govts 14,558.4 16,088.9 (-9.5) REUTERS SR RN1426