Who’d have guessed, eh? Oh, you would?

TOKYO (Nikkei)–On its surface, the fiscal 2012 budget plan will adhere to fiscal discipline, but a deeper look reveals unrestrained spending.

With 90.3 trillion yen in general-account spending, the plan to be finalized by the government on Saturday will mark the first year-on-year decline in initial-budget expenditures in six years. Yet despite its slimmed-down look, it will essentially weigh in as the biggest budget ever.

But Prime Minister Yoshihiko Noda and his cabinet have failed to put a leash on expenditures in key areas. One is the government’s share of the cost of the basic pension. Since fiscal 2009, the government has had to dip into special accounts to maintain its annual contribution to the pension program. This “buried treasure” has run out.

When it comes to local tax grants, the government appears to have largely conceded to pressure for more money.

The budget plan will also call for about 3.8 trillion yen for a new special account for post-disaster reconstruction. This spending will be managed separately from the general account because it will have its own revenue sources. If it were included in the general-account budget, however, total spending would rise to about 94 trillion yen, topping initial-budget figures for both fiscal 2010 and 2011. That hardly comes across as progress on fiscal discipline.

via 2011/12/23 04:19 – Budget Plan Goes Easy On Spending Cuts.

See also 2011/12/24 11:40 – Japan’s Reliance On Debt May Have Reached Limit: Azumi “”I think that Japan’s budget-making processes and its reliance on public debt have reached their limits,” Jun Azumi said at a news conference after the government approved a main budget for the next fiscal year, which starts in April.”

What is a “limit”? By what criteria? Is it the % of GDP?