March Ministry of Finance

Transcription

1 HIGHLIGHTS OF THE BUDGET FOR FY2000 March 2000 Ministry of Finance

2 Contents PAGE Highlights of the FY2000 Budget 1 General Account Budget 3 General Account Budget by Major Expenditure Programs 4 Trends of Government Bond Issues 5 Trends of Accumulated Government Bonds Outstanding 6 Trends of Interest Payment of Government Bonds 7 Trends of Tax Revenue (excluding Local Allocation Tax Grants), Government Bond Issues and The Ratio of Government Bond Issues to 8 Total Expenditures General Government Gross Debt (National Accounts basis) 9 General Government Financial Balance (National Accounts basis) 9 International Comparison 10 Source: OECD/Economic Outlook 66 (December 1999) 11 Outline of Major Expenditure Programs Public Works 12 Social Security 13 Special Category for Economic Rebirth Allocated to Projects Related to Telecommunications, Science and Technology, and Environment 15 Medium-Term Fiscal Projection;FY1999-FY2003 CASE 1:Assuming Nominal GDP Growth Rate of 3.5% 17 CASE2:Assuming Nominal GDP Growth Rate of 1.75% 18 Medium-term Fiscal Estimate,based on simple assumption of general expenditures;fy1999-fy2005 CASE A:Assuming Nominal GDP Growth Rate of 3.5% 19 CASE B:Assuming Nominal GDP Growth Rate of 1.75% 20

3 Tentative Translation Highlights of the FY2000 Budget Although the Japanese economy is continuously showing moderate improvement, it has not yet moved away from severe situation. Under this condition, the FY2000 budget has been compiled from the standpoint of providing utmost assurance to the government s economic management in putting the economy back onto the track to a full-scale recovery. Necessary and Sufficient Measures to cope with Economic and Financial Situations - In view of the current economic situation, necessary and sufficient measures are secured with regard to public works. For example, an amount identical to the FY1999 initial budget, which was compiled with a top priority on promoting economic recovery, has been budgeted. Also, contingencies for public works amounting to 500 billion have been budgeted. - As regards the financial situation, necessary and sufficient measures will be taken with the aim of stabilizing the financial system and ensuring depositor protection. For example, a total of 4.5 trillion will be budgeted and subsequently transferred to the Special Account for the National Debt Consolidation Fund for possible redemption of additional subsidy bonds held by the Deposit Insurance Corporation. Prioritized and Efficient Budget Allocation - The general expenditure as a whole increases by 2.6% compared with the FY1999 initial budget. The budget realizes focused allocation to priority areas. Science and Technology +6.8% Social Security +4.1% Small Businesses +1.0% ODA -0.2% Energy Measures -2.8% - A special budget set aside for facilities investment and etc. will be allocated to projects of significant importance including three focused fields designated in Millennium Projects (measures on information technology, aging society and environmental protection). * Special category for economic rebirth allocated to projects relevant to telecommunication, science and technology and environment ( 250 billion) - Also, to establish a new foundation for further economic development, the special budget for public works will be allocated to meet impending policy agendas. * Special priority-allocated category for economic rebirth on social infrastructures relevant to improving distributional efficiency, environment, telecommunication and town development ( 250 billion) - 1 -

4 Tentative Translation * Priority- allocated category for public works relevant to improving living environment ( 300 billion) Government Bond Issues: trillion, the Ratio of Government Bond Issues to Total Expenditure: 38.4% - The amount of government bonds to be issued: trillion ( trillion after the FY1999 second supplementary budget; the record high on an actual basis: trillion in FY1998) - The ratio of Government Bond Issues to Total Expenditure: 38.4% (43.4% after the FY1999 second supplementary budget; the record high on an actual basis: 40.3% in FY1998) - Construction bond issues: trillion Deficit-financing bond issues: trillion - 2 -

5 *1: of which; Transfer to the Special Account for the National Debt Consolidation Fund for possible redemption of subsidy bonds held by the Deposit Insurance Corporation 4,500 billion yen (FY1999: 2,500 billion yen) *2: of which; Contingencies for Public Works 500 billion yen (FY1999: 500 billion yen) Note: The ratio of government bond issue to total expenditure in FY2000 budget is expected to be 38.4%. However, when excluding components *1 and *2, the ratio would be 34.9% which is smaller than 36.0% (or 43.4%) in FY 1999 initial budget (or after the second supplementary budget).

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7 Trends of Government Bond Issues (Trillion Yen) ( % ) Government Bond Issues Total Expenditures Government Bond Issues Construction Bonds 鴐 Special Deficit-financing Bonds 21.0 鴐 Ad-hoc Deficit-financing Bonds which 18.5 should be redeemed by earmarked revenues FY Note: FY1975~1998: Settlement, FY1999: 2nd Revised Budget, FY2000: Budget -5-

8 Trends of Accumulated Government Bonds Outstanding (Trillion Yen) approx approx Bonds Outstanding FY Note: FY1965~98: Actual, FY1999, 2000: Estimate -6-

9 Trends of Interest Payment of Government Bonds (Trillion Yen) ( % ) 20 Interest Payment 19.1 Total Expenditures Interest Payment FY Note: FY1975~98: Settlement, FY1999: 2nd Revised Budget, FY2000: Budget -7-

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12 General Government Financial Balance (National Accounts basis) (International Comparison) (as a percentage of GDP) CY General Government Excluding Social Security Japan United States General Government Japan United States United Kingdom Germany France Italy Canada According to the estimate of the Japanese Government, the fiscal deficit (on a general government basis excluding social security) of GDP will be app.10.7% in FY1999, app.9.4% in FY (%) Japan France U.K. Germany Canada U.K. U.S.A. Germany Italy France U.S.A. Canada Italy Japan (CY) Japan and United States: General Government Financial Balance Excluding Social Security (Source) OECD/Economic Outlook 66 (December 1999) -10-

13 General Government Gross Debt (National Accounts basis) (International Comparison) (as a percentage of GDP) CY Japan United States United Kingdom Germany France Italy Canada According to the estimate of the Japanese Government, the government gross debt (on a general government basis excluding social security) of GDP will be app.123.1% in FY1999, app.132.9% in FY (%) 110 Italy Italy Japan 90 Canada Canada U.S.A. Japan France Germany U.S.A. U.K. France Germany U.K (CY) (Source) OECD/Economic Outlook 66 (December 1999) -11-

14 Public Works With the objective of putting the economy on track toward full-fledged recovery, an amount identical to the FY 1999 initial budget, which was compiled with a top priority on promoting economic recovery, has been budgeted. In order to establish a new foundation for further economic development, the public works budget will be allocated to meet impending policy agendas. A rigorous assessment of projects has been implemented to ensure efficiency and transparency, and positive measures have been made toward decentralization. Promoting the prioritization of policy areas Budget will be allocated on a priority basis to the projects and policies that are expected to foster a new foundation for further economic development. Promotion of economic structural reform by raising distribution efficiency Priority: Hub international airports, hub seaports, and arterial high-standard roads Development of a sustainable socioeconomy in harmony with the environment Priority: Measures against dioxins, and global warming Promotion of communities which can accommodate an aging society with a decreasing birthrate. Priority: Improvement of public facilities to accommodate an aging society with a decreasing birthrate. Establishment of a highly advanced information-based society Priority: Computerization of road traffic systems and optical fiber storage Securing transparency and efficiency Cost-benefit analyses and others will be used as criteria in making decisions on the implementation of public works projects. Projects in progress will also be reassessed and vigorously reviewed as in fiscal =>23 projects have been decided to be canceled, suspended, or scaled down. ->This will reduce project costs by more than 24.5 billion yen. Efforts toward decentralization On the basis of The Second Decentralization Promotion Program, etc. and with a view to clarifying the roles played by the central and local governments, the criteria for projects to be directly undertaken by the central government will be raised and subsidized projects will be reviewed

15 Social Security In light of an aging society with a decreasing birthrate in the 21st century, a stable, long-term social security system is being constructed through greater efficiency and rationalization to cope with emerging needs. Medical care-related budget 1. Review of benefits and contribution rates in the Medical Care Insurance System and Health and Medical Service for the aged In order to ensure stable management of the Medical Care Insurance System, necessary revisions will be implemented, such as a review of copayments by elderly patients as well as high medical expenses. 2. Revision of government-designated drug prices, medical fees, etc. In real terms 0.2% Revision of drug prices -1.7% (drug price revision: 7.0% on a drug price basis) Revision of medical fees 1.9% (Note: In line with the implementation of the Long-term Care Insurance Law, some medical expenses for the elderly will be transferred to care expenses in fiscal 2000.) Welfare 1. Smooth implementation of the Long-term Care Insurance Law To promote the smooth implementation of the Long-term Care Insurance Law from fiscal 2000, measures to decrease user costs for low-income families, to support at-home care, and to promote preventive care and livelihood support will be implemented, and the new Gold Plan 21 (fiscal ), including the improvement of care service foundations, will be steadily implemented. Enactment of the long-term Care Insurance Law and improvement of care service foundations: 22 billion yen in fiscal ,291.2 billion yen in fiscal 2000 (Fiscal 2000: Accommodations in special-care homes for the aged are to be increased by 10,000 beds, accommodations in health care facilities for the aged by 7,000 beds) 2. Promotion of comprehensive measures to cope with the decreasing birthrate The New Angel Plan (fiscal ) will be steadily promoted

16 Fiscal 1999 Fiscal 2000 Nursery capacity for infants under 3 years old (persons) 584, ,000 Promotion of extended childcare (places) 7,000 8,000 Recipients of child-rearing benefits will be expanded from those with children under 3 years old to those with children under the mandatory education age. Moreover funds required to support child-rearing will be increased by 40 billion yen. 3. Promotion of measures for persons with disabilities The Disability Plan (fiscal ) will be steadily implemented to promote support for independence and social participation. Pension-related budget With regard to Employees Insurance, pension benefits are supposed to be revised (-0.3%) in line with the change in the consumer price index. However, benefits will be left unchanged for fiscal 2000 as a special measure in light of the current socioeconomic situation and other factors. From fiscal 2001 onward, pension benefits will be revised based on the change in price levels since

17 Special Category for Economic Rebirth Allocated to Projects Related to Telecommunications, Science and Technology, and Environment The Prime Minister himself will select priority projects, such as Millennium Projects, deemed conducive to the rebirth of the Japanese economy towards the 21 st century, and focused, efficient allocation of the budget will be realized. (Total: 250 billion yen) Promotion of Millennium Projects (Total: billion yen) 1. Increase in use of information technology in education (11.9 billion yen) Establishment of LANs at public schools to connect classrooms to the Internet Development and distribution of educational software and contents 2. Realization of electronic government (9.9 billion yen) Establishment of the basis for electronic government, such as the government certification foundation (GPKI) Creation of electronic applications and notification procedures 3. Promotion of IT21 (15.2 billion yen) Realization of ultra-high-speed Internet communications Creation of next-generation computers 4. Human genome, rice genome (64 billion yen) Human genome analysis Promotion of single separation and function analysis of useful genes in the rice genome 5. Survey research on the development of a society and economy that promote employment of the elderly (1.3 billion yen) Large-scale survey research on the creation of a society and economy that will enable employment of the elderly 6. Development and introduction of next-generation technology to prevent global warming (4 billion yen) Development and standardization of fuel cells Promotion of a modal shift by bringing super high-speed ships (Techno Super Liner) into practical use R&D on stratospheric platforms Promotion of the ARGO plan 7. Measures against dioxins and environmental endocrine disrupting chemicals; development of recycling technology (10.4 billion yen) Effective control of the environmental risks posed by dioxins, environmental

18 endocrine disrupting chemicals, etc. 8. Research projects to facilitate a recycling-based society and economy (831 million yen) Comprehensive studies to plan an economic strategy for a mature society and economy 9. Soliciting of proposals for innovative technology development (3 billion yen) Other measures Development of an information-gathering satellite system, etc. (40.5 billion yen) Promotion of the Intelligent Transport System (ITS) (1.7 billion yen) Enhancement of the Geographic Information System (GIS) (1.1 billion yen) Promotion of new millennium commemorative events Internet Fair 2001 Japan (2.5 billion yen) Implementation of grants to support measures to remove anti-personnel mines. (1.5 billion yen) Strategic monitoring of the global environment (2 billion yen)

19 ( Tentative Translation) February 2000 The following table intends to project the fiscal situation, up to FY2003, under certain assumptions. The estimate should in no way be interpreted to bind government s future budget formulation, and the figures presented in the estimate are subject to change in accordance with changes in the assumptions as set forth below. Medium-term Fiscal Projection; FY1999-FY2003 [CASE 1] (Assuming Nominal GDP Growth Rate of 3.5%) ( Trillion Yen, % ) FY1999 FY2000 FY2001 FY2002 FY2003 ( 15.3) ( 9. 1 ) ( 9. 9 ) ( 10.8) National Debt Service ( 15.2) ( 9. 4 ) ( 10.4) [ 18.6] [ 20.4] [ 22.5] Local Allocation ( 10.4) ( 15.8) ( 1.0) ( 2. 6 ) Tax Grants ( 2. 6 ) ( 1. 1 ) ( 2. 1 ) ( 2. 5 ) OUTLAYS General Expenditures Social Security ( 4. 1 ) ( 3. 8 ) ( 4. 6 ) ( 4. 7 ) Related Expenditures ( 1. 8 ) ( 0.4) ( 0. 7 ) ( 1. 3 ) Others Including spending for ( 2. 6 ) ( 2. 6 ) ( 3. 6 ) ( 4. 0 ) new policies from FY [ 49.3] [ 51.1] [ 53.2] Transfer to the 1.6 Settlement Adjustment Fund ( 0.6) ( 3. 0 ) ( 4. 3 ) ( 3. 8 ) Total ( 0. 3 ) ( 3. 9 ) ( 5. 2 ) [ 85.3] [ 88.6] [ 93.2] ( 3. 3 ) ( 5. 0 ) ( 0. 5 ) ( 2. 5 ) REVENUES Tax Revenues excluding Government Bond Issues ( 0. 7 ) ( 13.9) ( 3. 5 ) ( 2.8) Non-Tax Revenues ( 3. 1 ) ( 3. 6 ) ( 0. 7 ) ( 2. 2 ) Total ( 7.3) ( 7. 2 ) ( 7. 8 ) OUTLAYS ( 5. 0 ) LESS Government Bond Issues REVENUES excluding ( 5.0) ( 9. 6 ) ( 10.1) Government [ 31.0] [ 34.0] [ 37.4] Bond Issues ( Memorandum) Government Bond Dependency Ratio Government Bonds Outstanding [ 36.3] [ 38.3] [ 40.1] [ ] [ ] [ ] Government Bonds Outstanding as a Percentage of GDP [ 75.6] [ 78.6] [ 81.8] Notes: 1. National Debt Service: Interest rates corresponding to the nominal GDP growth rate are assumed for the calculation. 2. Local Allocation Tax Grants: Also includes Special Local Grants intended to offset the revenue shortfall of local governments due to the permanent tax cuts. The elasticity assumed here for the calculation is The estimate also takes into account the effect of FY2000 tax reform, etc.. 3. General Expenditures: assumed that the policies and systems under the FY2000 budget will remain unchanged in the coming year. 4. Tax Revenues: The elasticity assumed here for the calculation is The estimate also takes into account the effect of FY2000 tax reform, etc.. 5. Government Bond Issues: For each fiscal year, the amount of government bonds to be issued is assumed to be equivalent to the gap between outlays and revenues excluding government bond issues. 6. Figures for FY1999 are based on the initial budget: However, figures for Government Bond Dependency Ratio, Government Bonds Outstanding, and Government Bonds Outstanding as a Percentage of GDP are based on the second supplementary budget. 7. Figures in the parenthesis indicate the percentage changes vis- 荴 -vis the previous fiscal years. 8. Bracketed include spending for new policies from FY2001. The ratio of spending for new policies to general expenditures is assumed to be 1. 5% in FY2001, 3. 0% in FY2002, and 4. 5% in FY2003 respectively

20 ( Tentative Translation) February 2000 The following table intends to project the fiscal situation, up to FY2003, under certain assumptions. The estimate should in no way be interpreted to bind government s future budget formulation, and the figures presented in the estimate are subject to change in accordance with changes in the assumption as set forth below. Medium-term Fiscal Projection; FY1999-FY2003 [CASE 2] (Assuming Nominal GDP Growth Rate of 1.75%) ( Trillion Yen, % ) FY1999 FY2000 FY2001 FY2002 FY2003 ( 19.2) ( 4. 1 ) ( 4. 7 ) ( 10.8) National Debt Service ( 19.1) ( 4. 3 ) ( 5. 0 ) [ 17.8] [ 18.5] [ 19.5] Local Allocation ( 10.4) ( 12.1) ( 2.8) ( 0. 9 ) Tax Grants ( 2. 6 ) ( 0. 7 ) ( 1. 7 ) ( 2. 0 ) OUTLAYS General Expenditures Social Security ( 4. 1 ) ( 3. 7 ) ( 4. 2 ) ( 4. 2 ) Related Expenditures ( 1. 8 ) ( 0.9) ( 0. 2 ) ( 0. 8 ) Others Including spending for ( 2. 6 ) ( 2. 2 ) ( 3. 2 ) ( 3. 5 ) new policies from FY [ 49.2] [ 50.7] [ 52.5] Transfer to the 1.6 Settlement Adjustment Fund ( 2.4) ( 1. 3 ) ( 2. 4 ) ( 3. 8 ) Total ( 1.6) ( 2. 2 ) ( 3. 4 ) [ 83.7] [ 85.5] [ 88.4] ( 3. 3 ) ( 3. 1 ) ( 1.4) ( 0. 5 ) REVENUES Tax Revenues excluding Government Bond Issues ( 0. 7 ) ( 15.2) ( 2. 0 ) ( 4.5) Non-Tax Revenues ( 3. 1 ) ( 1. 8 ) ( 1.2) ( 0. 2 ) Total ( 9.2) ( 5. 8 ) ( 6. 1 ) OUTLAYS ( 5. 0 ) LESS Government Bond Issues REVENUES excluding ( 6.9) ( 8. 2 ) ( 8. 4 ) Government [ 30.4] [ 32.9] [ 35.6] Bond Issues ( Memorandum) Government Bond Dependency Ratio Government Bonds Outstanding [ 36.3] [ 38.4] [ 40.3] [ ] [ ] [ ] Government Bonds Outstanding as a Percentage of GDP [ 76.8] [ 80.9] [ 85.4] Notes: 1. National Debt Service: Interest rates corresponding to the nominal GDP growth rate are assumed for the calculation. 2. Local Allocation Tax Grants: Also includes Special Local Grants intended to offset the revenue shortfall of local government due to the permanent tax cuts. The elasticity assumed here for the calculation is The estimate also takes into account the effect of FY2000 tax reform, etc.. 3. General Expenditures: assumed that the policies and systems under the FY2000 budget will remain unchanged in the coming year. 4. Tax Revenues: The elasticity assumed here for the calculation is The estimate also takes into account the effect of FY2000 tax reform, etc.. 5. Government Bond Issues: For each fiscal year, the amount of government bonds to be issued is assumed to be equivalent to the gap between outlays and revenues excluding government bond issues. 6. Figures for FY1999 are based on the initial budget: However, figures for Government Bond Dependency Ratio, Government Bonds Outstanding, and Government Bonds Outstanding as a Percentage of GDP are based on the second supplementary budget. 7. Figures in the parenthesis indicate the percentage changes vis- 荴 -vis the previous fiscal years. 8. Bracketed include spending for new policies from FY2001. The ratio of spending for new policies to general expenditures is assumed to be 1. 5% in FY2001, 3. 0% in FY2002, and 4. 5% in FY2003 respectively

21 (Tentative Translation) (Appendix) February 2000 The following table intends to estimate the fiscal situation, up to FY2005, under certain assumptions. The estimate should in no way be interpreted to bind government s future budget formulation, and the figures presented in the estimate are subject to change in accordance with changes in the assumptions as set forth below. Medium-term Fiscal Estimate, based on simple assumption of general expenditures; FY1999-FY2005 [CASE A] (Assuming Nominal GDP Growth Rate of 3.5%) (Trillion Yen, %) FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 General ( 15.2) ( 9.2) ( 10.0) ( 7.2) ( 8.0) Expenditures % National Debt General ( 10.8) ( 15.3) ( 9.1) ( 9.7) ( 6.8) ( 7.6) Service Expenditures % General ( 15.3) ( 8.9) ( 9.4) ( 6.4) ( 7.1) Expenditures % Local Allocation Tax Grants ( 10.4) ( 15.8) ( 1.0) ( 2.6) ( 3.3) ( 3.0) ( 2.0) ( 2.0) ( 2.0) ( 2.0) ( 2 0) 2% OUTLAYS General ( 2.6) ( 1.0) ( 1.0) ( 1.0) ( 1.0) ( 1.0) Expenditures 1% Transfer to the Settlement 1.6 Adjustment Fund ( 0.0) ( 0.0) ( 0.0) ( 0.0) ( 0.0) 0% General ( 0.0) ( 3.0) ( 4.0) ( 3.5) ( 3.7) Expenditures % General ( 3.8) ( 0.6) ( 2.4) ( 3.4) ( 2.9) ( 3.1) Total Expenditures % General ( 1.2) ( 1.8) ( 2.8) ( 2.3) ( 2.5) Expenditures % ( 3.3) ( 5.0) ( 0.5) ( 2.5) ( 3.1) ( 2.7) REVENUES Tax Revenues excluding Government Bond Issues ( 0.7) ( 13.9) ( 3.5) ( 2.8) ( 3.5) ( 3.5) Non-Tax Revenues ( 3.1) ( 3.6) ( 0.7) ( 2.2) ( 3.1) ( 2.7) Total General Expenditures ( 5.9) ( 7.0) ( 7.0) ( 4.2) ( 5.3) 2% OUTLAYS Government General LESS Bond Expenditures ( 5.0) ( 7.4) ( 5.3) ( 5.4) ( 2.6) ( 3.7) REVENUES Issues 1% excluding Government Bond Issues General Expenditures ( 8.9) ( 3.7) ( 3.8) ( 0.8) ( 2.0) 0% (Memorandum) Government Bond Dependency Ratio ~ ~ ~ ~ ~ 39.4 Government Bonds Outstanding ~ ~ ~ ~ ~512 Government Bonds Outstanding as a ~ ~ ~ ~ ~ 86.4 Percentage of GDP Notes: 1. National Debt Service: Interest rates corresponding to the nominal GDP growth rate are assumed for the calculation. 2. Local Allocation Tax Grants: Also includes Special Local Grants intended to offset the revenue shortfall of local governments due to the permanent tax cuts. The elasticity assumed here for the calculation is 1.2. The estimate also takes into account the effect of FY2000 tax reform, etc.. 3.General Expenditures: For FY2001 and subsequent fiscal years, the 48.1 trillion yen of FY2000 is assumed to grow by 0, 1, and 2% each fiscal year. 4.Tax Revenues: The elasticity assumed here for the calculation is 1.1. The estimate also takes into account the effect of FY2000 tax reform, etc.. 5.Government Bond Issues: For each fiscal year, the amount of government bonds to be issued is assumed to be equivalent to the gap between outlays and revenues excluding government bond issues. 6. Figures for FY1999 are based on the initial budget: However, figures for Government Bond Dependency Ratio, Government Bonds Outstanding, and Government Bonds Outstanding as a Percentage of GDP are based on the second supplementary budget. 7. For FY2001 and subsequent fiscal years, the indicators in the Memorandum contain two figures each fiscal year. The one on the left side represents the case in which general expenditures remain constant each year, whereas the one on the right side represents the case in which general expenditures grow by 2% each year. 8. Figures in the parenthesis indicate the percentage changes vis- 솴 -vis the previous fiscal years. -19-

22 (Tentative Translation) (Appendix) February 2000 The following table intends to estimate the fiscal situation, up to FY2005, under certain assumptions. The estimate should in no way be interpreted to bind government s future budget formulation, and the figures presented in the estimate are subject to change in accordance with changes in the assumptions as set forth below. Medium-term Fiscal Estimate, based on simple assumption of general expenditures; FY1999-FY2005 [CASE B] (Assuming Nominal GDP Growth Rate of 1.75%) (Trillion Yen, %) FY1999 FY2000 FY2001 FY2002 FY2003 FY20004 FY2005 General ( 19.1) ( 4.2) ( 4.9) ( 3.6) ( 4.6) Expenditures % National Debt General ( 10.8) ( 19.2) ( 4.1) ( 4.7) ( 3.3) ( 4.2) Service Expenditures % General ( 19.2) ( 4.0) ( 4.4) ( 2.9) ( 3.8) Expenditures % Local Allocation Tax Grants ( 10.4) ( 12.1) ( 2.8) ( 0.9) ( 1.7) ( 1.3) ( 2.0) ( 2.0) ( 2.0) ( 2.0) ( 2 0) OUTLAYS General 2% Expenditures ( 2.6) ( 1.0) ( 1.0) ( 1.0) ( 1.0) ( 1.0) 1% Transfer to the Settlement 1.6 Adjustment Fund ( 0.0) ( 0.0) ( 0.0) ( 0.0) ( 0.0) 0% General ( 1.7) ( 1.5) ( 2.4) ( 2.3) ( 2.5) Expenditures % General ( 3.8) ( 2.3) ( 0.9) ( 1.8) ( 1.6) ( 1.8) Total Expenditures % General ( 2.8) ( 0.3) ( 1.2) ( 1.0) ( 1.1) Expenditures % ( 3.3) ( 3.1) ( 1.4) ( 0.5) ( 1.1) ( 0.7) REVENUES Tax Revenues excluding Government Bond Issues ( 0.7) ( 15.2) ( 2.0) ( 4.5) ( 1.9) ( 1.9) Non-Tax Revenues ( 3.1) ( 1.8) ( 1.2) ( 0.2) ( 1.2) ( 0.8) Total General Expenditures ( 7.3) ( 6.3) ( 6.0) ( 4.0) ( 5.0) 2% OUTLAYS Government General LESS Bond Expenditures ( 5.0) ( 8.8) ( 4.7) ( 4.5) ( 2.4) ( 3.4) REVENUES Issues 1% excluding Government Bond Issues General Expenditures ( 10.3) ( 3.0) ( 2.8) ( 0.7) ( 1.8) 0% (Memorandum) Government Bond Dependency Ratio ~ ~ ~ ~ ~ 40.9 Government Bonds Outstanding ~ ~ ~ ~ ~507 Government Bonds Outstanding as a ~ ~ ~ ~ ~ 93.2 Percentage of GDP Notes: 1. National Debt Service: Interest rates corresponding to the nominal GDP growth rate are assumed for the calculation. 2. Local Allocation Tax Grants: Also includes Special Local Grants intended to offset the revenue shortfall of local governments due to the permanent tax cuts. The elasticity assumed here for the calculation is 1.2. The estimate also takes into account the effect of FY2000 tax reform, etc.. 3. General Expenditures: For FY2001 and subsequent fiscal years, the 48.1 trillion yen of FY2000 is assumed to grow by 0, 1, and 2% each fiscal year. 4. Tax Revenues: The elasticity assumed here for the calculation is 1.1. The estimate also takes into account the effect of FY2000 tax reform, etc.. 5. Government Bond Issues: For each fiscal year, the amount of government bonds to be issued is assumed to be equivalent to the gap between outlays and revenues excluding government bond issues. 6. Figures for FY1999 are based on the initial budget: However, figures for Government Bond Dependency Ratio, Government Bonds Outstanding, and Government Bonds Outstanding as a Percentage of GDP are based on the second supplementary budget. 7. For FY2001 and subsequent fiscal years, the indicators in the Memorandum contain two figures each fiscal year. The one on the left side represents the case in which general expenditures remain constant each year, whereas the one on the right side represents the case in which general expenditure grow by 2% each year. 8. Figures in the parenthesis indicate the percentage changes vis- 솴 -vis the previous fiscal years. -20-