TOKYO -- Having urged fellow Group of Seven leaders to stave off a looming global economic crisis with fiscal spending, Japanese Prime Minister Shinzo Abe has decided to seek a second round of additional funding just two months into the 2016 budget year.
Abe intends to propose a stimulus package in a special legislative session after the July upper house election. In the meantime, the government and the ruling coalition will discuss postponing a consumption tax increase set for April 2017.
Japan "will mobilize all policy options, including action on the fiscal front," against the threat of a global recession, Abe told reporters Friday following the conclusion of the G-7 summit in Ise-Shima.
The government will seek a supplementary budget worth 5 trillion yen to 10 trillion yen ($45.3 billion to $90.6 billion) -- including fiscal investment and loan program, or FILP, spending, which is separate from the general account -- that allocates money for public works and measures in a new plan to promote labor force participation.
Specific proposals include using FILP funds to accelerate construction of a magnetic-levitation train line between Nagoya and Osaka, issuing vouchers to stimulate consumer spending, raising pay for child-care workers and establishing a scholarship fund.
Officials envision paying for all of this with an expected increase in tax receipts and by issuing more deficit-covering bonds.
Abe said he is considering a delay in the April 2017 tax hike, which already has been postponed once. A formal announcement is expected Wednesday at the close of the current parliamentary session. The delay is seen lasting two years.