November 21, 2022

The cabinet recently decided on a set of comprehensive economic measures to overcome rising prices and realize economic revival. In response to this decision, the ministry of finance has drafted the second supplementary budget for FY2022. Before requesting your deliberation on the draft, I would like to explain the outline of the supplementary budget for your consideration.

(Introduction)

Under the “with Corona” phase, the Japanese economy is slowly picking up as socioeconomic activities continue normalizing. However, there has been a recent rise in international raw material prices against the backdrop of Russia’s invasion of Ukraine. In addition, prices of energy and food products closely related to our daily lives continue to rise due to the weak yen and other factors. Furthermore, there are growing concerns about a global economic recession.

Based on this recognition, the cabinet decided on the mentioned comprehensive economic measures to overcome rising prices and realize economic revival on October 28.

These comprehensive economic measures are designed to overcome the global economy’s current high prices and downside risks and revitalize the Japanese economy by solving social issues and achieving sustainable growth.

Specifically, the first measure is to address rising prices and wage increases. The second measure is to recover and strengthen regional earning power by taking advantage of the weak yen. The third is to accelerate the new capitalism, and the fourth is to promote disaster prevention, mitigation, and national land resilience in addition to responding to changes in the diplomatic and security environments. Through these efforts, we will promote the safety and security of the people. In addition, to prepare for the future, we will increase the reserve fund for Japan’s comprehensive emergency measures to counter soaring crude oil and other prices under the COVID-19 pandemic and to establish a new reserve fund for an economic emergency response to the situation in Ukraine.

Through these comprehensive economic measures, the government will first make an all-out effort to address the current high prices and revive the Japanese economy to achieve sustainable economic growth. We also believe it is important to continue to promote responsible economic and fiscal management.

(Outline of the second supplementary budget for FY2022)

Next, I would like to outline the second supplementary budget for FY2022, which has been submitted to the current session of the Diet for implementing these comprehensive economic measures.

We will appropriate approximately 28.92 trillion yen in the general account for expenditures. As for the details, about 7.82 trillion yen will be appropriated for expenses related to efforts to address price hikes and wage increases in accordance with the mentioned comprehensive economic measures. Approximately 3.49 trillion yen will be appropriated for expenses related to the recovery and reinforcement of the regional earning power by taking advantage of the weak yen. Approximately 5.5 trillion yen will be appropriated for expenses related to accelerating the new capitalism. Approximately 7.55 trillion yen will be appropriated for expenses related to ensuring public safety and security through disaster prevention and mitigation, promoting national resilience, and responding to changes in the diplomatic and security environment. To prepare for the future, the government will set aside 3.74 trillion yen in the reserve fund for Japan’s Comprehensive Emergency Measures to Counter Soaring Crude Oil and other Prices under the COVID-19 Pandemic. In addition, one trillion yen will be appropriated for a newly created reserve fund for Ukraine’s situation and economic emergency response. As a result, the general account portion of Japan’s national expenditures related to the comprehensive economic measures amounts to approximately 29.09 trillion yen. The total amount of the special account is approximately 29.63 trillion yen.

Furthermore, we recorded approximately 690 billion yen as a transfer to the Special Account for the Government Bond Consolidation Fund and approximately 220 billion yen as other expenses while reducing the predetermined expenses by approximately 1.08 trillion yen.

In terms of revenue, taxes and other revenues are expected to increase by approximately 3.12 trillion yen, considering recent revenue performance, employment and wage trends, and other factors. In addition, we anticipate an increase of approximately 670 billion yen in non-tax revenues and a surplus of approximately 2.27 trillion yen from the previous fiscal year.

The revenue shortfall resulting from the above measures will be covered by the issuance of approximately 22.85 trillion yen in bonds.

As a result, the second revised budget for the FY2022 general account will be approximately 139.22 trillion yen, an increase of approximately 28.92 trillion yen in revenue and expenditures from the first revised budget. Also, necessary amendments have been made to the special account budget.

Regarding the Fiscal Investment and Loan Program, based on the comprehensive economic measures, approximately 1.02 trillion yen have been added to promote efforts to address rising prices and wage increases as well as investments in priority areas of the new capitalism.

(Conclusion)

This concludes my explanation of the outline of the second supplementary budget for FY2022.

The environment surrounding the Japanese economy is becoming increasingly severe, and we must firmly support people’s daily lives and business activities. Doing so will overcome this difficult situation and put the Japanese economy on a sustainable and higher growth path. For this reason, it is necessary to enact these budgets and related bills as soon as possible.

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