Gov`t manages to salvage over 2.5 tril. yen from extra budget

TOKYO, Oct. 6 Kyodo -
Japan's new government said Tuesday it has managed to scrape together more than
2.5 trillion yen from the 14.7 trillion yen extra budget for fiscal 2009,
approved under the preceding government, to fund its key policies.
Prime Minister Yukio Hatoyama, leader of the ruling Democratic Party of Japan,
seemed to have been satisfied with the tentative amount, telling reporters that
the figure turned out to be a ''considerable amount.''
Yet, Hatoyama asked administrative reform minister Yoshito Sengoku to make more
efforts to cut wasteful allocations earmarked in the extra budget so the
DPJ-led government can put more money into the hands of consumers through its
key policies such as monthly allowances for families with children, Sengoku
told a news conference.
The Hatoyama administration, launched in mid-September, has targeted salvaging
at least 3 trillion yen from the supplementary budget by stopping what it sees
as unnecessary stimulus programs.
The key policies the DPJ promised to implement during the general election
campaign are estimated to require 7.1 trillion yen in fiscal 2010, which also
includes scrapping expressway tolls, and waving public high school tuitions.
So far, the government said it has managed to squeeze 2,516.9 billion yen from
the largest-ever extra budget.
''Historically,'' it is ''extremely rare'' and probably ''the first time ever''
for Japan to return to the national coffers money allocated in a formulated
budget and freeze steps funded by the budget, Sengoku said in the evening.
Sengoku, deputy chief of the Government Revitalization Unit, a new government
body set up to eliminate wasteful spending of taxpayers' money, said the final
amount of expenditure savings is unlikely to be fixed until next week, as
''tough adjustments'' will continue at each ministry and agency.
Asked whether he thinks the modification of the extra budget will drag down the
nation's already flagging economy, Sengoku said, ''If we can carry out a change
that would be meaningful for the people's lives, we can remain neutral in terms
of the economy.''
The 2.5 trillion yen accounts for about 17.2 percent of the overall
expenditures for the extra budget excluding allocations for parliament and
certain other government entities.
By ministry, the Land, Infrastructure, Transport and Tourism Ministry will
scrap measures worth 887.5 billion yen, the largest amount, according to the
government.
How much money the new government will be able to redirect from the budget for
some of its own stimulus programs is seen as the first litmus test of its
ability to govern.
Last Friday was the deadline for government ministries and agencies to report
expenditure savings to Hatoyama's Cabinet.
But the Cabinet did not reveal how much it could eventually scrape together
from the extra budget, crafted by the previous government led by the Liberal
Democratic Party, which lost to the DPJ in the Aug. 30 House of Representatives
election.
In addition to the overhaul of the extra budget, the Hatoyama government has
been in the process of drafting the budget for the next fiscal year starting in
April.
Despite a possible sharp fall in tax revenues, Finance Minister Hirohisa Fujii
and Chief Cabinet Secretary Hirofumi Hirano on Tuesday did not appear to
support increasing the issuance of debt-covering bonds in the next fiscal year
from the fiscal 2009 level.
At a news conference, Fujii also said a new tax panel will convene its first
meeting on Thursday to begin addressing issues such as the DPJ-led government's
pledge to cut gasoline taxes.
The advisory panel to Hatoyama, to be headed by Fujii, will serve as the sole
decision-making body for tax reforms, abolishing the two-tier tax panel system
of the government and ruling parties under the previous government.
==Kyodo