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Tuesday, July 26, 2011

¥2 trillion reconstruction bill clears Diet


Staff writer

The Diet enacted Monday a ¥2 trillion second extra budget for fiscal 2011 to finance disaster relief and reconstruction since March 11, one of the three conditions laid down by Prime Minister Naoto Kan for his exit.

The Liberal Democratic Party and New Komeito, the main opposition forces, supported the extra budget, whose passage was delayed from Friday due to a boycott last week by LDP lawmakers of a televised Upper House Budget Committee session.

The extra budget, worth ¥1.99 trillion, allocates ¥275.4 billion to pay for damages suffered by victims of the nuclear crisis at the Fukushima No. 1 plant, including money to monitor the health of Fukushima Prefecture residents.

It also earmarks ¥377.4 billion in financial support for quake and tsunami survivors, including securing new loans for indebted individuals and businesspeople who need to rebuild their livelihood or companies. The supplementary budget also sets aside ¥800 billion for postquake reconstruction.

Kan said last month that he would "hand over my responsibility to the younger generation" after passage of three key bills.

The other bills concern issuing deficit-covering bonds and the establishment of a mechanism for power companies to buy solar power at fixed rates.

With the passage of the extra budget, even some members of his own Democratic Party of Japan urged Kan to resign.

Deputy Chief Cabinet Secretary Yoshito Sengoku told reporters in Nagano Prefecture that Kan now needs to "draw a line and is at the stage of taking action."

Regarding the bill on deficit-covering bonds, LDP and New Komeito executives say they will cooperate with its passage if the DPJ agrees to an income cap on the child allowance policy and scrap some key campaign pledges.

The focus is now shifting to a third extra budget, which officials say could top ¥10 trillion and would force the government to issue "reconstruction bonds" to finance.

Given the deteriorating state of public finances, though, the government is almost set to provisionally raise some taxes and secure funds to service the bonds.

Information from Kyodo added



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