Japan Passes $49 Billion Disaster Reconstruction Package With More to Come

Japan’s parliament passed a 4-trillion yen ($49 billion) budget for rebuilding after the March 11 earthquake, the first in a series of relief packages.

The Diet’s upper house unanimously approved the extra spending after the lower house passed the measure on April 30.

Prime Minister Naoto Kan has said several extra budgets may be needed to rebuild after the quake, tsunami and nuclear crisis, with government estimates putting the damage at as much as 25 trillion yen. Higher taxes may be needed to limit any increases in bond sales that would swell a debt burden already twice the size of the economy.

Today’s package will be financed using 2.5 trillion yen from pension funds as well as money originally intended to increase payments to families with children. Bond sales will be necessary for the next plan, officials have said.

Money will go toward the clean-up and more than 100,000 temporary houses after the temblor left more than 25,000 people dead or missing. Economic and Fiscal Policy Minister Kaoru Yosano said on April 21 that reconstruction “must” be backed by higher levies.

To contact the reporter on this story: Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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