By NAOKI TSUZAKA/ Staff Writer
July 22, 2020 at 16:05 JST
The Finance Ministry (Naoki Tsuzaka)
No upper limit will be set for government ministries seeking budgetary funds for fiscal 2021 to combat the novel coronavirus pandemic so long as the money is used exclusively to deal with the health crisis, according to the Finance Ministry.
The ministry added the caveat that it would scrutinize every request to ensure not a single yen is wasted.
Normally, the Cabinet approves standards for initial budget requests submitted by government ministries and agencies.
But the Finance Ministry on July 21 said no maximum limit would be set for emergency requests to deal with infectious diseases.
Finance Minister Taro Aso announced the rules for this year’s budget compilation at a Cabinet meeting held the same day.
While ministries will be allowed to submit requests up to the levels of this fiscal year’s initial amounts for programs already envisaged, a separate category for emergency spending to deal with infectious diseases will also be established and no cap will be placed on such requests.
The new policy direction reflects the difficulties of anticipating measures that might be needed to deal with upheavals in social conditions due to the spread of COVID-19 infections.
An easier procedure to submit requests was chosen to reduce the work burden on central and local government officials already under the gun dealing with the fallout from the coronavirus pandemic.
Ministries will also be given additional time to submit their budget requests as the deadline was pushed back by a month over past years to the end of September.
While the Finance Ministry continues its campaign to eliminate wasteful spending, the lack of a limit to deal with the novel coronavirus pandemic will likely lead to bloated budget requests.
This is bound to impact other ministries as business groups and local governments have pushed for increased spending to help them deal with the pandemic.
A major headache for the Finance Ministry will be how to maintain sustainability in the nation’s fiscal condition, given the expected large increase in outlays even as it faces the likelihood of a sharp decrease in tax revenues due to worsening economic conditions caused in part by business closures during the crisis.
This fiscal year’s initial budget as well as two supplementary budgets to deal with the coronavirus have led to a record total spending amount of about 160 trillion yen ($1.5 trillion).
About 90 trillion yen in government bonds are to be issued to help pay for those expenditures.
If a similar level of spending is required for the next fiscal year, the government’s plan to restore the fiscal health of the nation will be even further delayed and future generations will be left to foot the bill.
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