Kan orders extra budget formation to boost Japan economy+

TOKYO, Sept. 27 Kyodo -
Prime Minister Naoto Kan instructed his Cabinet and ruling party members on
Monday to draw up an extra budget for the current fiscal year to finance an
additional stimulus package aimed at accelerating the battle against deflation,
while expressing hope he could have dialogue with opposition parties on the
issue.
Government sources said the supplementary budget for fiscal 2010, which ends in
March, could top 4 trillion yen ($47.5 billion), and that Kan is expected to
refrain from issuing any new government bonds to fund the extra budget as part
of his efforts to restore Japan's fiscal health, the worst among major
developed countries.
''I gave an order while asking them also to study possible funding sources (for
the budget),'' Kan told reporters.
Without issuing any new debt, the government would have to finance the extra
budget with tax revenues, the previous year's budget surplus and other sources.
The instruction by the premier came at an executive meeting between the
government and the Democratic Party of Japan. The Cabinet is expected to submit
a draft budget to the extraordinary Diet session, which will convene Friday.
After the meeting, DPJ Secretary General Katsuya Okada told reporters, ''Given
tough economic conditions, it's extremely important to quickly get a
supplementary (budget) passed (by the parliament).''
With the fresh stimulus, Kan would seek to improve the nation's employment
conditions, boost such industries as nursing and medical care and offer support
to smaller companies, among other purposes. The government also has to address
the negative impact from the recent sharp rise of the yen against other major
currencies, which has hurt the country's exporters.
The Cabinet officially approved a 917 billion yen stimulus package last week.
Emergency spending backed by the extra budget would be the second in a series.
Kan also told the meeting that he wants to promote talks with the opposition
camp on how to compile the extra budget.
The formation of the emergency budget is associated with growing calls from
opposition parties as well as from some in the ruling camp for the government
to do more to stimulate the economy.
The DPJ-led coalition has said it will listen carefully to the opposition camp,
which now controls the House of Councillors, though Kan's ruling bloc holds a
majority in the more powerful House of Representatives.
Okada suggested that the exact size of the supplementary budget would be
determined after such inter-party talks.
The largest opposition Liberal Democratic Party has called for 5 trillion yen
worth of fiscal stimulus.
Chief Cabinet Secretary Yoshito Sengoku added to the view that Kan is not
considering issuing new bonds.
The government ''will likely move in that direction,'' the top government
spokesman told reporters in reference to last week's remarks by Kan, who said
the government ''will study how much we can respond without issuing bonds.''
==Kyodo
2010-09-27 23:37:32


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