Yamasaki flips stance on 30 trillion yen bond cap

Ruling Liberal Democratic Party Secretary General Taku Yamasaki indicated Sunday that the government should ease its 30 trillion yen cap on fresh bond issuance for fiscal 2002.

His comments mark a turnaround from his earlier support of Prime Minister Junichiro Koizumi’s pledge to limit new government bond issues to 30 trillion yen. Calls have been growing from within the LDP to scrap the limit and compile an extra budget for fiscal 2002, which ends in March, and Koizumi hinted earlier this month that he may renege on his promise.

Yamasaki said on a TV program that the government must “flexibly think about” additional bond issues while considering a supplementary budget in case tax revenues, as expected, run short.

Yamasaki suggested Koizumi may be ready to give up the limit for the sake of an extra budget. He said the prime minister “has stuck to his basic stance of correcting financial discipline, rather than to a symbolic figure of 30 trillion yen.”

Toshihiro Nikai, secretary general of the New Conservative Party, one of the LDP’s partners in the three-party ruling coalition, echoed Yamasaki’s views during the program. “I believe the public will approve, even if Mr. Koizumi changes his policy,” he said.

But Kansei Nakano, secretary general of the largest opposition Democratic Party, warned against the anticipated policy turnaround.

“Prime Minister Koizumi has been saying that he will protect the 30 trillion yen limit and never work out a supplementary budget,” he said. “If he keeps on breaking his public commitments, he should take responsibility for it.”

Koizumi has said an extra budget for fiscal 2002 will not be submitted to the ongoing extraordinary Diet session that began Friday, but he has not ruled out compiling one afterward.

The 30 trillion yen limit has already been reached in the initial fiscal 2002 budget.