Japan gov't having second thoughts on key child allowance pledge+

TOKYO, Nov. 18 Kyodo - The government will review a plan to offer allowances to families with children starting in fiscal 2010 -- a signature pledge of the Democratic Party of Japan's election campaign -- Cabinet members said Wednesday.

Finance Minister Hirohisa Fujii told a news conference that whether to set an
income limitation for the allowance program ''could be a point of argument''
among Cabinet members, at a time when the two-month-old government is
struggling with budget constraints for the year starting April.
During the election campaign, the DPJ promised to provide monthly allowances of
13,000 yen in fiscal 2010 and 26,000 yen from fiscal 2011 for each child of
junior high school age or younger, regardless of income levels.
The review is partly due to differences of opinion within the ruling coalition
over the framework for the allowance program.
Fujii said policies mapped out in the DPJ's campaign platform are ''important''
but added, ''We still have to think about the amount of money'' for each of
them.
He also said that whether to ask local governments and companies to shoulder
some of the funds for the allowance program would be on the agenda during the
review.
The DPJ's junior coalition partners -- the Social Democratic Party and the
People's New Party -- have called for an income cap to be applied to the
program, which would require 2.7 trillion yen for fiscal 2010 if monthly cash
payments of 13,000 yen are given to all families with children of junior high
school age or younger.
Deputy Prime Minister Naoto Kan also said that the allowance program and the
planned abolition of provisional gasoline and other automobile-related taxes
will be the subjects of the Cabinet's budget reexamination.
Prime Minister Yukio Hatoyama, however, signaled that the government would
stick to its initial plan, telling reporters not setting an income limit is ''a
fundamental principle'' and he wants to continue to discuss the matter along
this line.
The remarks came a day after the Cabinet outlined a basic policy for a planned
second extra budget for fiscal 2009 and the budget for fiscal 2010.
Amid a shortfall in tax revenue, the Cabinet on Wednesday initiated the process
of sorting out economic policy priorities for fiscal 2010 under the leadership
of Kan, also state minister for national strategy, and economic and fiscal
affairs.
Yoshito Sengoku, state minister in charge of administrative reform, said
Wednesday at a House of Representatives Cabinet Committee session that Japan's
tax revenue is likely to fall to around 38 trillion yen or even lower in the
current fiscal year to March 31, far below the initially estimated 46.1
trillion yen.
The government is trying to pare down expenses as much as possible, while tax
revenue for fiscal 2010 is expected to slump to around the same level as this
fiscal year.
Hatoyama and Fujii have said the government would not issue government bonds
beyond the 44 trillion yen planned by the previous government for fiscal 2009.
But how exactly the government will finance the next fiscal year's budget
without further deterioration in the nation's fiscal health has not been
clarified.
On a request basis, the budget for fiscal 2010 has swelled to a record 95
trillion yen, despite the DPJ-led government's resolve to cut wasteful outlays.
The ongoing screening to downsize the budget plan will run until the Cabinet
finalizes its draft, possibly by the end of this year.
==Kyodo