Japan Plans to Draft Stopgap Budget for First Time in 14 Years
Japan’s government will draft a stopgap budget for the first time in 14 years as the nation’s parliament struggles to pass a spending bill before the new fiscal year starts on April 1.
The interim budget will total 3.6 trillion yen ($43.4 billion) to pay for spending and to cover the minimum cost of running the government for the first six days of April, according to a release published by the finance ministry today.
Passage of the main budget has been delayed by disputes over a sales tax increase and opposition attempts to dissolve parliament. Prime Minister Yoshihiko Noda’s ruling party yesterday signed off on a bill to double Japan’s sales tax to 10 percent by 2015 to pay for swelling pension and welfare costs, a measure opposed by opposition parties and some members of the ruling party.
Under Japanese law, a budget proposal will be enacted automatically 30 days after approval by the lower house, the more powerful of the nation’s two parliamentary chambers. The fiscal 2012 budget bill will become effective on April 6.
The government doesn’t intend to sell any bonds to pay for the interim budget though it plans to issue short-term securities worth about 3.6 trillion yen to finance expenditures for the first six days.
The last time Japan adopted a temporary budget was in 1998 when Ryutaro Hashimoto, who was prime minister at the time, struggled to push through a budget proposal in parliament that stalled over measures to tackle the country’s financial crisis.
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