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Thursday, Oct. 13, 2011
Budgeting for reconstruction
The government ministries and agencies have made budget requests for fiscal 2012 that total a record ¥99 trillion, exceeding the fiscal 2011 initial budget of ¥96.746 trillion. Because the government has used up surplus funds to compile the third supplementary budget for fiscal 2011 for the reconstruction from the March 11 earthquake, tsunami and crisis at the Fukushima No. 1 nuclear power plant, the government will have difficulty in making ends meet.
Under the middle-term framework for the budget from fiscal 2012 to fiscal 2014, expenditures excepting debt service cost must be held down to ¥71 trillion for fiscal 2012, the same as the fiscal 2011 initial budget. The bond issuance for fiscal 2012 is also to be limited to ¥44 trillion, the same as in fiscal 2011.
The ministries and agencies were asked to reduce their policy-related budget requests by 10 percent from the fiscal 2011 initial budget. But since Prime Minister Yoshihiko Noda has removed the ceiling for budget requests related to the reconstruction from the triple disasters, such requests have swollen to ¥3.5 trillion.
The requests related to the reconstruction include ¥141.9 billion for making school buildings quake-proof, ¥374.4 billion for decontamination of areas affected by radioactive substances from the Fukushima No. 1 nuclear power plant and ¥79.2 billion for disposal of waste from disaster-hit areas.
Mr. Noda also has decided to set aside ¥700 billion for such purposes as sowing seeds for new economic growth, promotion of renewable energy, revitalization of regional economies, development of human resources and the building of a safe society. The budget requests under this category have swelled to about ¥2 trillion.
The Cabinet Office requested ¥243.7 billion for the development of Okinawa Prefecture in an apparent effort to get consent from the prefecture for a plan to relocate the U.S. Marine Corps Futenma Air Station to another place in the prefecture.
The possibility cannot be ruled out that ministries and agencies have made mutually overlapping requests or asked funds for wasteful projects. The Finance Ministry must make serious efforts to eliminate wasteful use of government money, including perks for retired high-ranking bureaucrats. Since the government plans to carry out massive tax raises for the reconstruction, without such efforts it will not be able to obtain the people's understanding.