Japan's government has approved the country's smallest proposed budget in four years for the year to March 2003 as it attempts to cut waste and push for reforms.
"We boldly took the initial step of the reform-implementation budget," Prime Minister Junichiro Koizumi told reporters today.
Koizumi's cabinet approved the proposed 81.23 trillion-yen (635 billion US dollar) budget, which is down 1.7 percent from the initial budget for the current fiscal year.
It will be debated at the Diet (parliament) in January for legislative approval.
The cabinet's proposed budget reflects a slump in tax revenues and Koizumi's promise of fiscal policy reforms.
It was formulated in line with Koizumi's pledge to keep new government bond issues under 30 trillion yen in the year to March 2003.
"While capping the government bond issuance under 30 trillion yen, we were able to compile the budget by cutting outlays in less important areas while increasing them in priority areas," Koizumi said.
Under the new budget proposal, spending on public works projects would be cut by 10.7 percent. Official development assistance - used to aid developing nations - would fall by 10.3 percent.
Spending would rise in seven priority areas including: environment; the elderly; urban development; regional revitalization; science and technology; human resources development; and information technology.
AFP