Japan govt OKs $43 bln stopgap budget for 2012/13

TOKYO: Japan’s government
approved a stopgap
budget worth 43 billion
dollar today to cover the
fi rst week of the fi scal year
from April 1 due to a delay
in passage of the main annual
budget, illustrating its
struggle to legislate in a split
parliament.
The temporary budget, the
fi rst of its kind in 14 years,
was compiled as it became
clear that the full budget
would not be approved before
the start of the new
fi scal year amid opposition
stonewalling in parliament,
boding ill for the passage of
the government’s unpopular
plan to double the 5 percent
sales tax.
The provisional budget totalling
3.6105 trillion yen is
aimed at covering minimum
administrative spending
needed until April 6, when
the main budget comes into
force. The bulk of it will be
covered by issuing fi nancing
bills, but it entails no new
additional bond issuance.
The main budget will be
enacted even if rejected by
the opposition-controlled
upper house, because the
lower house can override the
upper chamber on budget issues.
The upper house has
dragged its feet and is yet
to vote on the main budget,
but it will come into force
regardless on April 6, which
is 30 days after passage by
the lower house.
Prime Minister Yoshihiko
Noda’s cabinet plans to approve
on Friday its plan to
double the sales tax to 10
per cent by late 2015 and
submit it to parliament. But
Noda has yet to fi nd a way
to win backing from the opposition,
which has threatened
to block the tax hike
bills so as to force an early
election, as they need approval
from both chambers.
Underscoring the gravity
of Japan’s huge debt challenge,
nearly half of next
fi scal year’s 90.33 trillion
yen budget will have to be
fi nanced by new borrowing.
Public debt is twice the
size of Japan’s 5 trillion
dollar economy, the worst
among industrial nations.