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Thursday, March 25, 2010

Record fiscal '10 budget enacted


Staff writer

The ruling bloc enacted the fiscal 2010 budget Wednesday, clearing the way to reflect the Democratic Party of Japan's campaign vows while cranking out an unprecedented ¥44.3 trillion in new bonds.

The ¥92.3 trillion budget bill — the largest ever — failed to win over the opposition camp led by the Liberal Democratic Party but was endorsed by the DPJ and its two junior partners, the Social Democratic Party and Kokumin Shinto (People's New Party).

Having survived relentless grilling from the opposition over a series of political money scandals, Prime Minister Yukio Hatoyama assured that the budget will help stimulate the sluggish economy.

"New strategies for growth will create more jobs, which will fuel the economy," Hatoyama said during an Upper House Budget Committee session in the morning. The favorable cycle will halt deflation, he added.

The budget and related bills cleared the plenary session vote in the afternoon with the ruling coalition's comfortable majority. It was the fifth earliest date in postwar history that a budget has cleared the Diet.

Passing the budget before a fiscal year starts is crucial for any administration, but the DPJ's dodgy funding put additional pressure on Hatoyama's inexperienced Cabinet.

The DPJ's support rate fell over its spate of political money scandals, particularly by Hatoyama's unregistered donations from his mother. DPJ Secretary General Ichiro Ozawa saw aides arrested over the shady nature of cash paid into his fund management body, some of which is believed to have been used to buy land in Tokyo.

DPJ lawmaker Chiyomi Kobayashi joined the list of disgrace earlier this month when it was revealed that arrests were made over illegal donations to her election office prior to the general election last August. The LDP-led opposition camp slammed the DPJ's shady funding during deliberations on the budget bill, including boycotting some sessions.

With public opinion polls showing the Cabinet's approval rate sliding near the critical 30 percent mark, Hatoyama had acknowledged that issues of "money and politics" were key reasons for the Cabinet's quick decline in popularity. But he has repeated that once the budget is enacted, it should provide tangible changes to the public's lives and help check the DPJ's fall.

Hatoyama's first annual budget ballooned as the DPJ tried to live up to its campaign pledges to help support people's livelihoods.

The government is now aiming to enact two key remaining bills — one for providing monthly allowances for families with children and the other for a tuition waiver program for high schools — by next Wednesday.

The budget calls for a nearly 10 percent rise in welfare spending to ¥27.27 trillion, while public works projects have been slashed as promised by the DPJ by more than 18 percent to ¥5.77 trillion, the lowest level in 32 years.

Falling tax revenues forced Hatoyama to backpedal on some promises, including cutting a gasoline tax. Budget-related bills jointly enacted Wednesday include maintaining fuel tax surcharges and raising the tax on tobacco.

While the government will issue an unprecedented ¥44.3 trillion in new bonds, it will also tap reserves and retained earnings in special accounts to pull in an additional ¥10.6 trillion in nontax receipts to bridge the budget gap.

The Hatoyama administration is expected to continue facing pressing tasks to appeal to voters before the July Upper House election.



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The Japan Times

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