Japan Panel to Estimate Reconstruction Costs at 15-20 T. Yen

Tokyo, June 9 (Jiji Press)--A key Japanese government council is considering putting the total costs to rebuild areas devastated by the March 11 earthquake and tsunami at 15 trillion to 20 trillion yen, it was learned Thursday.
The figures include 4 trillion yen already earmarked under the first supplementary budget for fiscal 2011.
A subgroup under the postdisaster reconstruction design council has started discussions on the necessary costs. The council's estimate will be shown in its first report to be published later this month.
The council, chaired by National Defense Academy of Japan President Makoto Iokibe, will propose that if the reconstruction costs are covered by the issuance of additional government bonds, temporary tax hikes should be studied to eke out resources for redemption of the bonds so as not to pass the financial burden on to future generations.
All tax items, including consumption, corporate, individual income and fixed-asset taxes, should be subject to the discussions on possible hikes, according to a draft of the first report.
The council will stop short of saying when and how much these taxes should be raised, informed sources said, adding that some members are calling for slashing public service salaries and public works spending to cover part of the bond redemption costs.
The draft calls for promoting the use of renewable energy, constructing and improving breakwaters against tsunami, and establishing special zones in disaster areas where regulations will be eased to shore up the regional economies.