Gov`t OKs policy on suspending part of extra budget

TOKYO, Sept. 18 Kyodo -
Prime Minister Yukio Hatoyama's government formally adopted a basic policy
Friday to suspend part of the supplementary budget for the current fiscal year,
in order to swiftly work on his promise to reprioritize spending items from the
budget compiled by his predecessor.
The government also set up two key bodies later in the day that his Democratic
Party of Japan has advocated creating -- the Administrative Reform Council and
the National Strategy Office -- to begin acting on the goal of asserting
greater political control over Japan's bureaucracy.
The DPJ has pledged to review the extra budget, which was compiled by the
previous administration led by the Liberal Democratic Party, and intends to use
any money made available through the process to realize its key initiatives,
such as subsidies for child-rearing families and toll-free expressways.
At a Cabinet meeting, Hatoyama instructed ministers to review all spending
projects earmarked in the extra budget to see which should be suspended and to
report the results to a Cabinet committee overseeing the matter by Oct. 2,
Chief Cabinet Secretary Hirofumi Hirano told a news conference.
The prime minister, in particular, ordered the suspension of projects for which
money has already been transferred to intended recipients -- worth a total of
4.36 trillion yen -- excluding that transferred to local governments, if doing
so would not adversely affect people's lives, Hirano said.
The government plans to scrap most of the 30 or so programs worth a total of
roughly 1.94 trillion yen, excluding those set up by local governments, from
the next fiscal year starting April, on the grounds that their contribution to
economic stimulus is questionable, government officials said. One such program
is designed to promote farmland consolidation.
The government also eyes suspending spending for building and refurbishing
ministry and agency facilities and state-run university facilities, worth a
total of about 600 million yen, because there is no urgent need for them, the
officials said.
Meanwhile, Internal Affairs and Communications Minister Kazuhiro Haraguchi
indicated that local governments might be instructed to suspend some of their
projects in the extra budget, saying, ''We cannot create a haven for local
projects.''
A number of prefectural governors have expressed objections to the suspension
plan, saying that provincial areas have suffered more severely than urban areas
from the economic slump.
Economy, Trade and Industry Minister Masayuki Naoshima told a press conference
that the ''eco-point'' incentives for consumers' purchases of
environmentally-friendly goods would be exempted from the suspension.
Environment Minister Sakihito Ozawa said the eco-point measure should be kept
in place until the economy turns the corner because it has played a role in
improving the economy.
Of the extra budget incorporating projects worth some 15.3 trillion yen,
excluding tax cuts, money not yet been spent because specific outlays have yet
to be determined accounts for about 8.3 trillion yen, according to the Finance
Ministry and other sources.
The government hopes to squeeze out between 3 and 4 trillion yen through the
review so it can use the money to finance the key initiatives the DPJ promised
to implement during the general election campaign. The initiatives are
estimated to cost 7.1 trillion yen in fiscal 2010.
Finance Minister Hirohisa Fujii told a news conference on Friday that the
proposed suspension would be extensive. ''It will not be such a small figure,
it will come to several trillion yen.''
Other projects eyed for suspension because they are unlikely to serve well as
pump-priming measures include a proposal to build a national ''media arts''
center dubbed the animation hall and the purchases by government offices of TV
sets for viewing terrestrial digital broadcasting services.
The extra budget was formulated by the previous administration of Taro Aso as a
way to stimulate the country's recession-mired economy.
Established in the Cabinet Office and chaired by the prime minister, the
Administrative Reform Council intends to get rid of government spending deemed
wasteful to make room for new spending proposals.
The National Strategy Office, which was created within the Cabinet Secretariat,
is aimed at devising basic policies on the contours of taxation and finance and
of the country's economic management. It is expected to be upgraded to a
National Strategy Bureau in the future.
Hatoyama's DPJ won a landslide victory in the Aug. 30 House of Representatives
election, wresting control of the government from the long-ruling LDP.
Replacing Aso, Hatoyama was named new prime minister on Wednesday.
==Kyodo