The economy-boosting extra budget being formulated for fiscal 2012 may be worth around ¥12 trillion — including more than ¥4 trillion for public works projects, sources said Monday.
Prime Minister Shinzo Abe’s government is close to cementing the size of the supplementary budget, which would cover the rest of the year ending in March. The ruling bloc, led by his Liberal Democratic Party, won December’s general election by promising huge fiscal spending to fight chronic deflation and address the strong yen.
Government offices were required to submit their requests for the emergency spending plan by Monday. Abe’s Cabinet is expected to approve the draft budget on Jan. 15 before submitting it to the Diet, the sources said.
Read the rest of the story: Size of extra budget may test ¥12 trillion.
Japan’s Prime Minister Naoto Kan moved closer to resigning after opposition parties agreed to back legislation to finance this year’s budget, a condition set by the premier for leaving office.
Kan’s Democratic Party of Japan along with the Liberal Democratic Party and New Komeito will pass a bill to sell bonds to finance government spending “without delay,” according to a joint statement given to reporters yesterday in Tokyo. The parties also agreed to scrap reduced highway tolls, and will postpone a review of benefits to high school students and farm subsidies until the next fiscal year, the statement said.
“The measure has been a factor in a political game and that’s finally over,” said Chotaro Morita, chief strategist at Tokyo-based Barclays Capital Japan Ltd. “The market’s attention will be on who would be the next prime minister, especially because some candidates look like they are against raising taxes for fiscal health.”
Read the rest of the story: Kan Closer to Quitting After Japan Agrees on Budget Funding.
Japan’s lower house on Tuesday passed a record trillion-dollar budget that will add to an already bulging public debt mountain as Tokyo tries to stimulate a recovery in the world’s second biggest economy.
The 92.3 trillion yen (1.0 trillion dollar) budget includes new child-care allowances, free public high school tuition and other measures promised by the centre-left government that took power in September.
To finance it, the government will issue a record 44.3 trillion yen in new bonds.
Read the rest of the story: Japan passes record $1 trillion budget
Photo: (AFP/Kazuhiro Nogi)