Prime Minister Ryutaro Hashimoto’s study group on fiscal reform, consisting of leaders from the government, the ruling party and its allies, said Feb. 20 it will review the planned 630 trillion yen to be spent on public works projects between fiscal 1995 and 2004, officials said.
The planned review comes amid mounting calls for drastic cutbacks in light of the nation’s fiscal structure, which is plagued by a mountain of debts. One member at the second meeting of the Conference on Fiscal Structural Reform said that given the current slow economic growth, it is almost impossible to spend the sum as planned, and that the period can be made longer than 10 years under the current program, according to Chief Cabinet Secretary Seiroku Kajiyama.
Kajiyama went on to say that although the program was adopted by the Cabinet in 1994, a statement made at that time indicates the government can decide on the amount of spending while taking the fiscal situation into consideration. “The government won’t be able to fully implement the program unless it secures 5 percent annual growth for public works spending,” Kajiyama said. “If the fiscal reconstruction is to be carried out, the review of the program may as well be taken up in the conference.” The 10-year public works program was drawn up by the government of then Prime Minister Tomiichi Murayama as part of efforts to expand domestic demand.