Aso says Koizumi should scrap 30 trillion yen bond limit

A top policymaker of the ruling Liberal Democratic Party urged Prime Minister Junichiro Koizumi on Sunday to help pave the way for an extra budget and discard his pledge to limit the issuance of new government bonds to 30 trillion yen for this fiscal year.

“It’ll be impossible to make up for a shortage in revenue with the 30 trillion yen bond issuance because tax receipts are falling,” Taro Aso, chairman of the LDP’s policy council, said on a TV Asahi program.

“With the budgetary condition far worse than once thought, the government should help the private sector begin investing by compiling a supplementary budget not burdened with the 30 trillion yen pledge,” Aso said.

The key LDP policymaker, however, fell short of saying how large the extra budget should be.

“If asked whether (the size of the budget) should be 3 trillion yen, I would think it might be 3 trillion yen,” Aso said, grinning to the talk-show host who badgered him with the question.

Koizumi has said he will keep the annual bond issuance to 30 trillion yen in the current fiscal year that ends next March.

But the prime minister has been under growing pressure to scrap the pledge to enable the government to draft an extraordinary budget to finance pump-priming measures, and earlier this month he hinted he may scrap it.