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Sunday, June 26, 2011

Tax increase urged to pay for rebuilding

Advisory panel tells ruling camp, opposition to end squabbling


Staff writer

The government's reconstruction panel submitted a report Saturday to Prime Minister Naoto Kan mapping out measures needed to recover from the devastating March 11 quake and tsunami.

Dubbed "Fukko e no Teigen — Hisan no naka no Kibo" ("The Proposal Toward Reconstruction — Hope Within Despair"), the report covers a wide range of proposals, including the need to consider a tax hike to finance the series of reconstruction measures.

The government plans to draft second and third extra budgets for fiscal 2011 based on the report, but it is unclear how far the effort can move forward under a prime minister who has expressed his intention to resign.

"This proposal covers a wide range of challenges, including the economy, society, community and the nuclear power plant accident and I think it is a profound proposal," Kan told panel members. "We would like to take on reconstruction from now on by making the best use of this proposal."

The report stipulates that a temporary increase in core taxes, such as the consumption, income and corporate taxes, is necessary to cover the government's special "reconstruction bonds" to fund rebuilding measures. The government on Friday estimated that it will take ¥16.9 trillion to rebuild infrastructure, buildings and roads.

But the report doesn't specify which taxes should be raised or for how much, leaving it up to the government to decide.

"We must share the financial burden of the restoration and reconstruction together with all of the people in this generation, instead of passing it on to the next generation," the report says. "Along with cutting spending, the government should promptly consider a temporary tax hike of core taxes amid the increase in demand for reconstruction."

The 15-member Reconstruction Design Panel, headed by Makoto Iokibe, president of the National Defense Academy of Japan, was set up in April after the Great East Japan Earthquake wreaked havoc in the northeast, claiming the lives of more than 15,000 people and leaving close to 7,400 missing.

And while the nation deals with the aftermath of the disaster as well as the crisis at the Fukushima No. 1 nuclear plant, the ruling and opposition parties have been squabbling over the timing of Kan's resignation.

After submitting the proposal to Kan, Iokibe urged the two camps to cooperate on overcoming the national crisis.

"Our common wish is for the ruling and opposition parties to join together, especially during a serious national crisis, to rescue the people and to rescue the disaster area," Iokibe said.

The council also said that Japan, which cannot avoid natural disasters because of its geological features, should shift from the concept of disaster prevention to "disaster minimization."

The report states that the government should take responsibility in bringing the damaged nuclear plant under control as soon as possible and help the people affected. Furthermore, it stresses the need for the government to monitor radiation levels throughout Japan based on a unified standard.

"The reconstruction process of the areas affected by the nuclear accident should be viewed as longer term than the other disaster areas," the report says. "The people should all share the understanding that there is no end to the reconstruction of the great disaster until the land of Fukushima is brought back to life."



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