November 20, 2023

We have prepared a draft supplementary budget for FY2023 in response to “Comprehensive Economic Measures for Completely Overcoming Deflation”, which was recently approved by the Cabinet. Before requesting deliberation on it, I would like to provide an outline of the draft supplementary budget.

(Introduction)

The Japanese economy is improving after overcoming the three years of the COVID-19 pandemic. However, the continued price hikes starting from the price increase in import goods are pressing the people's lives and preventing people from feeling that their lives are improving along with the economic recovery.

Based on this recognition, “Comprehensive Economic Measures for Completely Overcoming Deflation” was approved by the Cabinet on November 2.

These comprehensive economic measures are designed to further accelerate the efforts to achieve the New Form of Capitalism. “Strengthening supply capacity” to vigorously advance reforms, and “return the benefit to the people” to help them improve their immediate situation and overcome rising commodity prices, are the “two wheels of a cart”.

Specifically, the government will carry out the following initiatives: “Countermeasures against Price hike Protecting People’s Lives”; “Achieving Sustainable Wage Increases including Regions, Medium Enterprises and SMEs and Income Improvements, and Realizing Regional Growth”; “Promoting Domestic Investment that Contributes to Strengthening and Upgrading Growth Potential”; “Initiating and Promoting Societal Transformations to Overcome Population Decline and Converting the Change to Power”; and “Securing the Safety and Security of the People through National Resilience, and Disaster Prevention and Mitigation” .

(Summary of the FY2023 supplementary budget)

Next, I would like to outline the FY2023 supplementary budget, which was submitted to the Diet mainly for implementing the comprehensive economic measures. Regarding the general account, we are asking for approximately 13.2 trillion yen in terms of expenditures. As for the details, based on the comprehensive economic measures: approximately 2.74 trillion yen will be appropriated for expenses related to “Countermeasures against Price hike Protecting People’s Lives”; approximately 1.33 trillion yen for expenses related to “Achieving Sustainable Wage Increases including Regions, Medium Enterprises and SMEs and Income Improvements, and Realizing Regional Growth”; approximately 3.44 trillion yen for expenses related to “Promoting Domestic Investment that Contributes to Strengthening and Upgrading Growth Potential”; approximately 1.34 trillion yen for expenses related to “Initiating and Promoting Societal Transformations to Overcome Population Decline and Converting the Change to Power”; and approximately 4.28 trillion yen for expenses related to “Securing the Safety and Security of the People through National Resilience, and Disaster Prevention and Mitigation”. Furthermore, we will allocate approximately 1.31 trillion yen as a transfer to the Special Account for the National Debt Consolidation Fund, approximately 780 billion yen as local allocation tax grants, and approximately 1.49 billion yen as other expenses while reducing the existing expenditure by approximately 3.51 trillion yen.

In terms of revenue, tax revenues are expected to increase by approximately 170 billion yen, considering the recent tax collection and other factors. In addition, we anticipate an increase of approximately 760 billion yen in non-tax revenues and the surplus of approximately 3.39 trillion yen from the previous fiscal year.

As for the revenue insufficiency, despite the above, we will issue public bonds for approximately 8.88 trillion yen.

As a result, the total general account budget for FY2023, after the supplement, will be approximately 127.58 trillion yen, which is an increase by approximately 13.2 trillion yen in both revenue and expenditure.

Also, Necessary supplementary measures were made to the special account budget.

Regarding the fiscal investment and loan program, based on the comprehensive economic measures, approximately 890 billion yen have been added to carry out efforts to promote domestic investment that will contribute to strengthening and upgrading growth potential and efforts to ensure the people's safety and security.

(Conclusion)

This concludes my explanation of the outline of the draft supplementary budget for FY2023.

The Japanese economy is facing a unique and unprecedented opportunity to achieve a transformation not seen in 30 years. We need to take advantage of this opportunity to create a strong cycle of consumption and investment through structural wage increases that exceed commodity price increases and the expansion of aggressive investments. For this reason, it is necessary to enact this supplementary budget as soon as possible.

I hereby request that the Diet deliberate on the supplementary budget and promptly give its approval.