ID :
54564
Thu, 04/09/2009 - 12:43
Auther :
Shortlink :
https://oananews.org//node/54564
The shortlink copeid
Gov't eyes largest-ever spending for FY 2009 extra budget+
TOKYO, April 8 Kyodo - The government is planning to compile a fiscal 2009 supplementary budget that will involve actual fiscal spending of 15 trillion yen, the largest-ever scale for an extra budget, to help Japan overcome the current economic crisis, ruling
coalition sources said Wednesday.
The Finance Ministry presented its blueprint for an extra budget proposal to
the ruling coalition, saying the total size of the budget will likely reach
56.5 trillion yen, the sources said. The total size will include such measures
as tax cuts and credit guarantees to struggling businesses.
The government is working on the extra budget on an instruction by Prime
Minister Taro Aso who pledged an additional pump-priming package at a financial
summit in London earlier this month to pull the world's second-largest economy
out of recession.
The government and the ruling bloc are set to finalize on Friday a fresh
stimulus plan for the coming three years, which will be partly financed by the
supplementary budget.
To finance the extra budget, the government will secure 3 trillion yen by
tapping reserves in its special account budget for the fiscal investment and
loan program, and 1 trillion yen from special emergency reserves set aside in
the fiscal 2009 principal budget, the sources said.
In addition, the government will newly issue bonds worth more than 10 trillion
yen, they said.
The massive bond issuance by the country which already faces the worst fiscal
conditions among developed economies is expected to spark concerns among market
players, resulting in a rise in Japan's long-term interest rates.
The envisioned extra budget will surpass the 7.6 trillion yen of actual
spending in the third extra budget for fiscal 1998, which is currently the
largest ever.
Aside from the Finance Ministry's blueprint, the ruling Liberal Democratic
Party and its coalition partner the New Komeito reached an agreement Wednesday
that tax cut measures in the next stimulus package should include a hike in the
upper limit of gift tax exemption from the present 5 million yen to 6.1 million
yen per year. The exemption, a provisional measure effective through the end of
2010, will be for taxpayers purchasing homes.
The Finance Ministry's blueprint shows breakdowns of actual spending and the
size of programs to be created by three political goals -- preventing the
economy from going into freefall, boosting growth potential over the long term,
and alleviating people's concerns while reactivating regional economies.
For the goal of preventing freefall, the government plans to earmark 4.9
trillion yen for emergency projects such as support for nonregular workers and
finances for cash-strapped small businesses. The outlays are expected to fund
programs worth 44.5 trillion yen in total.
For programs dedicated to boost growth potential, the government will allocate
6.0 trillion yen in actual spending for the goal and implement projects worth a
total of 8.5 trillion yen.
Projects under this category will concern the promotion of solar power
generation and environmentally friendly vehicles, financial aid for nursing
care service providers, and revitalization of farm and fisheries industries.
Modernizing key infrastructures such as airports and seaports to boost the
nation's competitiveness will also be included.
For example, the government plans to subsidize consumers purchasing
eco-friendly home electronics and cars.
Under the incentive programs, consumers will be able to receive a refund
equivalent to 5 percent of their purchases of energy-saving home electronics in
the form of ''eco-points'' from public funds. The points cannot be cashed and
can only be used to purchase other products.
The government is also planning to offer subsidies for purchases of hybrid and
other energy-saving cars. If consumers scrap cars that have been registered for
more than 13 years and buy eco-friendly cars, a subsidy of 250,000 yen will be
provided.
For projects worth a total of 3.5 trillion yen to alleviate people's concerns
and reactivate regional economies, the government will set aside 4.3 trillion
yen in actual fiscal spending. The size of projects is smaller than the scale
of outlays because the central government's subsidies to local municipalities
are excluded.
Those projects will include works to reinforce quake resistance of housing and
other buildings, and steps to ease consumers' concerns.
In a bid to revitalize regional economies, the central government will shoulder
90 percent of financial burdens local municipalities will bear for public works
projects.
Meanwhile, the main opposition Democratic Party of Japan decided on its own
economic stimulus plan Wednesday, which will involve actual spending of 21
trillion yen for the coming two years and aim to raise disposable income of
households with an average annual salary of 4 million yen by 20 percent.
The DPJ package includes a child-rearing allowance, a plan to do away with
expressway tolls and subsidies for farmers and fishermen. The party plans to
secure necessary funds by eliminating wasteful use of tax money, tapping
reserves in special account budgets and newly issuing deficit-covering bonds in
fiscal 2009.
==Kyodo
coalition sources said Wednesday.
The Finance Ministry presented its blueprint for an extra budget proposal to
the ruling coalition, saying the total size of the budget will likely reach
56.5 trillion yen, the sources said. The total size will include such measures
as tax cuts and credit guarantees to struggling businesses.
The government is working on the extra budget on an instruction by Prime
Minister Taro Aso who pledged an additional pump-priming package at a financial
summit in London earlier this month to pull the world's second-largest economy
out of recession.
The government and the ruling bloc are set to finalize on Friday a fresh
stimulus plan for the coming three years, which will be partly financed by the
supplementary budget.
To finance the extra budget, the government will secure 3 trillion yen by
tapping reserves in its special account budget for the fiscal investment and
loan program, and 1 trillion yen from special emergency reserves set aside in
the fiscal 2009 principal budget, the sources said.
In addition, the government will newly issue bonds worth more than 10 trillion
yen, they said.
The massive bond issuance by the country which already faces the worst fiscal
conditions among developed economies is expected to spark concerns among market
players, resulting in a rise in Japan's long-term interest rates.
The envisioned extra budget will surpass the 7.6 trillion yen of actual
spending in the third extra budget for fiscal 1998, which is currently the
largest ever.
Aside from the Finance Ministry's blueprint, the ruling Liberal Democratic
Party and its coalition partner the New Komeito reached an agreement Wednesday
that tax cut measures in the next stimulus package should include a hike in the
upper limit of gift tax exemption from the present 5 million yen to 6.1 million
yen per year. The exemption, a provisional measure effective through the end of
2010, will be for taxpayers purchasing homes.
The Finance Ministry's blueprint shows breakdowns of actual spending and the
size of programs to be created by three political goals -- preventing the
economy from going into freefall, boosting growth potential over the long term,
and alleviating people's concerns while reactivating regional economies.
For the goal of preventing freefall, the government plans to earmark 4.9
trillion yen for emergency projects such as support for nonregular workers and
finances for cash-strapped small businesses. The outlays are expected to fund
programs worth 44.5 trillion yen in total.
For programs dedicated to boost growth potential, the government will allocate
6.0 trillion yen in actual spending for the goal and implement projects worth a
total of 8.5 trillion yen.
Projects under this category will concern the promotion of solar power
generation and environmentally friendly vehicles, financial aid for nursing
care service providers, and revitalization of farm and fisheries industries.
Modernizing key infrastructures such as airports and seaports to boost the
nation's competitiveness will also be included.
For example, the government plans to subsidize consumers purchasing
eco-friendly home electronics and cars.
Under the incentive programs, consumers will be able to receive a refund
equivalent to 5 percent of their purchases of energy-saving home electronics in
the form of ''eco-points'' from public funds. The points cannot be cashed and
can only be used to purchase other products.
The government is also planning to offer subsidies for purchases of hybrid and
other energy-saving cars. If consumers scrap cars that have been registered for
more than 13 years and buy eco-friendly cars, a subsidy of 250,000 yen will be
provided.
For projects worth a total of 3.5 trillion yen to alleviate people's concerns
and reactivate regional economies, the government will set aside 4.3 trillion
yen in actual fiscal spending. The size of projects is smaller than the scale
of outlays because the central government's subsidies to local municipalities
are excluded.
Those projects will include works to reinforce quake resistance of housing and
other buildings, and steps to ease consumers' concerns.
In a bid to revitalize regional economies, the central government will shoulder
90 percent of financial burdens local municipalities will bear for public works
projects.
Meanwhile, the main opposition Democratic Party of Japan decided on its own
economic stimulus plan Wednesday, which will involve actual spending of 21
trillion yen for the coming two years and aim to raise disposable income of
households with an average annual salary of 4 million yen by 20 percent.
The DPJ package includes a child-rearing allowance, a plan to do away with
expressway tolls and subsidies for farmers and fishermen. The party plans to
secure necessary funds by eliminating wasteful use of tax money, tapping
reserves in special account budgets and newly issuing deficit-covering bonds in
fiscal 2009.
==Kyodo
