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2011 March 30 - April 5 [POLITICS]

Budget approved without adjusting for post-disaster recovery

March 30, 2011
FY2011 budget in the government’s original form was approved on March 29 without any adjustment for possible needs in post-disaster recovery.

The budget totals about 92.4 trillion yen in the general account, and about half of the amount relies on non-tax revenues and debts.

The government allocates more than 400 billion yen for nuclear power plant-related projects based on the existing plan to construct 14 nuclear reactors.

Although 14 key harbors were heavily damaged in the disaster-hit areas, 32.7 billion yen plus 550 billion yen through 2020 are budgeted for a project to develop new ports in other regions.

The government earmarks one trillion yen for U.S. military-related spending for the next five years, including for the so-called “sympathy” budget. The money is equivalent to 12 million yen to each family in financial aid to repair or replace homes in the tsunami-hit region.

The government subsidies to political parties, with the exception of the Japanese Communist Party, amount to 32 billion yen as the government originally earmarked in its draft.

Corporate tax cuts of 5% (1.5 trillion yen) and securities tax breaks (500 billion yen) will come into question because Prime Minister Kan Naoto on March 29 hinted at suspending them as an option to increase tax revenues for disaster relief.

The urgent need is for the government to expand the budgets for social security programs and anti-disaster measures as a step towards relief and reconstruction. However, the Kan Cabinet reduces the amount of pension benefits for the elderly and the disabled, and also slashes the amount of child-rearing allowance for single-parent households.

The JCP is arguing that a major amendment to the FY2011 budget will create an additional five trillion yen a year by ending the generous tax cuts (2 trillion yen) for large corporations and the rich, Japan’s burden in U.S. military-related expenses, unnecessary development projects, promotion of more nuclear reactors, and the subsidies to political parties.

Furthermore, the JCP is proposing that a portion of corporate internal reserves amounting to staggering 244 trillion yen be used to rebuild the disaster-affected region and restore local economies. As an example, the party is encouraging the government to issue a bond to finance reconstruction works and instruct large corporations to buy the bond.
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