TOKYO (AFX-ASIA) - Prime Minister Junichiro Koizumi aims to cut 1 trln yen from fiscal expenditures on government-affiliated corporations and agencies in the year to March 2003, the Nihon Keizai newspaper reported.
It said the prime minister aims to create enough cushion to impose a 30 trln yen ceiling on the issuance of new government bonds in the year.
Koizumi yesterday told Nobuteru Ishihara, state minister for administrative and regulatory reform, to target the 1 trln yen reduction in the budget allocation guidelines to be drawn up by the Ministry of Finance by August 10.
The plan represents a nearly 20 pct reduction from the roughly 5.3 trln yen in government money allocated to the corporations and agencies in fiscal 2001, the newspaper said.
The prime minister also told Ishihara to review all corporations and agencies under the assumption that they will eventually be privatized or eliminated altogether, it said.
Koizumi also wants to see increased information disclosure from the corporations and a speedy move to narrow down the entities targeted for budget cuts, it said.
"I expect opposition initially," Ishihara told the newspaper in an interview yesterday evening. "But the Koizumi cabinet is trying to do what was not possible in the past."
Ishihara said he plans to issue as early as September a restructuring blueprint spelling out options for privatization or elimination of specific public corporations.
Ishihara had been operating on the assumption that a 1 trln yen reduction in government spending on public corporations could be accomplished in stages over a five-year period of concentrated reform. Achieving the cut in a single fiscal year "will be extremely difficult," he said.
"I will need to ask for the cooperation of the finance minister and the other cabinet members involved to get even a little closer to this goal," Ishihara said.
If the year to March 2003 budget process were to proceed without any cuts, new government bond issuance would total some 33 trln yen, the newspaper said.