Stimulus set at more than 20 trillion yen
The Yomiuri Shimbun
Economy-boosting measures will reach more than 20 trillion yen as the government is set to allocate 10.3 trillion yen for stimulus measures in its supplementary budget for this fiscal year, which likely will total 13.1 trillion yen, it was learned Tuesday.
In addition to the 10.3 trillion yen from state coffers, spending by local governments and the private sector on public works and other projects make the emergency economic measures worth more than 20 trillion yen, according to government sources.
The size of the supplementary budget will be nearly as much as the first supplementary budget for fiscal 2009, which totaled 13.9 trillion yen. The budget was compiled by the administration of then Prime Minister Taro Aso as the largest-ever economy-boosting measures following the "Lehman shock."
With such large spending, the government intends to expedite efforts to overcome deflation, the sources said.
The government is set to formally compile emergency economic measures Friday and obtain Cabinet approval for the supplementary budget next Tuesday.
Besides spending on economy-boosting measures, the supplementary budget also includes 2.6 trillion yen to make up for the shortfall in basic pension benefit payments.
Public works projects, which will be the pillar in the economic measures, are expected to cost 5.2 trillion yen. This will be financed by the issuance of government construction bonds.
Of the 10.3 trillion yen, 3.7 trillion yen will be allocated for "reconstruction and disaster management measures," which includes repairing aging roads, tunnels and railways as well as reconstruction from the Great East Japan Earthquake.
Regarding some public works projects, the central government plans to shoulder a portion of the burdens by providing local governments with 1.4 trillion yen in subsidies. With this, even local governments with revenue shortfalls can implement projects.
In the category of "creation of wealth by growth," 3 trillion yen will be allocated for such measures as promotion of energy-saving and renewable energy-related equipment as well as support for research in advanced science and technology, including induced pluripotent stem cell technology.
For measures to "ensure security in people's daily lives and revitalize local communities," the budget will include 1.9 trillion yen to beef up support in child-rearing and employment. Increasing the number of day-care centers is one such measure.
To prevent the nation's economy from further worsening, the government intends to make the supplementary budget an integral part of its 15-month budget coupled with the fiscal 2013 initial budget.
Economic revival HQ convenes
The government's economic revival headquarters led by Prime Minister Shinzo Abe approved the outline of emergency economic measures, centering on steps for reconstruction and disaster management, at its first meeting Tuesday.
During the meeting, which was attended by all ministers, Abe said, "The economic measures are the first work by the new administration toward the nation's economic revival."
"We'll draw up an ambitious growth strategy probably in the middle of the year. I want all the ministers to regard this matter as our top-priority task and work hard on it," he added.
During the meeting at the Prime Minister's Office, the headquarters also decided to set up its subordinate industrial competitiveness council, where nine members selected from the private sector will discuss ways to boost the economy.
The nine members are Saki Corp. Chief Executive Officer Sakie Akiyama; Toray Industries, Inc. Chairman Sadayuki Sakakibara; Komatsu Ltd. Chairman Masahiro Sakane, who is also vice chairman of the Japan Business Federation (Keidanren); Mizuho Financial Group President Yasuhiro Sato; Keio University Prof. Heizo Takenaka; Lawson Inc. President Takeshi Niinami; Prof. Kazuhito Hashimoto of the University of Tokyo's Research Center for Advanced Science and Technology; Takeda Pharmaceutical Co. President Yasuchika Hasegawa, who also serves as representative director of the Japan Association of Corporate Executives; and Rakuten Inc. Chairman and President Hiroshi Mikitani.