Japan's public works spending likely to grow 2% in fiscal 2014
TOKYO -- The Japanese government's budget draft for next fiscal year will earmark around 5.4 trillion yen ($52 billion) for public works spending, excluding extraordinary factors, a 2% increase from this fiscal year.
Discussion of the proposal by the relevant cabinet ministers will wrap up at the end of this week. The government will eliminate the special account for construction projects such as roads as of fiscal 2014, shifting much of these funds into the public works budget and effectively pushing it up to 6 trillion yen.
Even without this factor, the budget is about 2% larger than fiscal 2013's figure. The ruling Liberal Democratic Party has increased public works spending in both of the budgets it has put together since its comeback. Increased expenditures from the consumption tax hike taking effect in April, the start of the Japanese fiscal year, were taken into account as well.
The new shinkansen lines under construction are a focal point of this area of the budget. The proposal will increase publicly funded construction spending on the sections that have already been started by 2% to the 72 billion yen range -- the first such move in nine years. The government is also boosting spending on anti-disaster measures in response to the March 2011 earthquake.
Public works spending peaked in fiscal 1997's initial budget at 9.74 trillion yen. The government of the Democratic Party of Japan slashed the fiscal 2010 allocation by 18% on the year. The stimulus-oriented LDP reversed this change upon their return to power, boosting such spending in fiscal 2013 by 16%.