Japan's lower house OKs extra budget for FY 2013
TOKYO (Kyodo) -- The House of Representatives approved Tuesday a 5.47 trillion yen extra budget for fiscal 2013 to fund an economic stimulus package aimed at cushioning the potential negative impact on the economy of a sales tax hike in April.
The supplementary budget for the fiscal year through March, endorsed by Prime Minister Shinzo Abe's Cabinet in December, is expected to be enacted Thursday, lawmakers said.
Under the budget, the government plans to implement the stimulus package -- centering on promoting reconstruction work following the March 2011 quake-tsunami disaster and public works projects including new infrastructure investment ahead of the 2020 Tokyo Olympics.
The budget also entails cash benefits to those on low incomes, people with children and home buyers, in an attempt to prevent the consumption tax hike from hurting households.
With concern growing over ballooning public spending, Abe said during a parliamentary session earlier Tuesday, "We have to make every effort to cut expenditures toward achieving our (fiscal consolidation) goals."
The government will not issue additional bonds to fund the extra budget, as the country's tax revenues this fiscal year are likely to be higher than its initial estimate on the back of the budding economic recovery.
Tokyo has internationally pledged to halve the ratio of the primary balance deficit to gross domestic product by fiscal 2015 from the fiscal 2010 level and turn the balance into a surplus by fiscal 2020. A deficit in the balance means the nation cannot finance government spending other than debt-servicing costs without issuing new bonds.
Japan's fiscal health is the worst among major industrialized economies, with public debt at over 200 percent of GDP.