Diet reopens; relief package main focus

Opposition parties looking to kill cash handout in extra budget

by Kazuaki Nagata

Diet convened Monday for a regular 150-day session, with debate to focus on immediate economic relief measures mapped out in the second extra budget bill for fiscal 2008.

The government and ruling coalition hope to pass the extra budget as soon as possible, but the bill will inevitably face a political tug of war, with the Democratic Party of Japan, the main opposition force, holding sway in the Upper House.

Although the Liberal Democratic Party-New Komeito ruling bloc wants the bill to clear the Lower House after debate Thursday and Friday, DPJ Diet affairs chief Kenji Yamaoka said it needs a five-day debate.

Finance Minister Shoichi Nakagawa, in his fiscal policy speech for the Diet session, addressed the global economic turmoil.

“The world financial and capital markets have fallen into a crisis that happens only once in (a century),” he said. “Japan’s economy has been negatively affected by this crisis and is worsening with declines in exports and production and a slump in consumption.”

The extra budget includes a ¥4.68 trillion measure for protecting livelihoods, including a ¥500 billion safety net for small and midsize businesses. It would also earmark ¥160 billion for employment measures.

The opposition parties say there are aspects of the budget they agree with, but they are against the bill because of the ¥2 trillion cash handout.

The government plans to distribute ¥12,000 to every person, including foreigners with permanent resident status. It will give an additional ¥8,000 to everyone 18 or younger or 65 and older.

“We can’t tolerate that some ¥2 trillion would be scattered (to woo voters before an election), so we are requesting revision, separation or retraction” of the payout, the DPJ’s Yamaoka said.

The bill is expected to quickly pass the Lower House, where the ruling bloc holds a commanding majority, but the opposition-controlled Upper House is expected to put up resistance.

The ruling coalition has no plans to drop the cash handout.

Chief Cabinet Secretary Takeo Kawamura said the payout is part of the administration’s economic measures to stimulate domestic consumption.

He said the ruling coalition initially thought of cutting fixed-rate taxes but instead opted for the handout because some people who are not taxpayers would not benefit from a tax cut.

“We’d like to deal with this matter squarely and would like understanding,” Kawamura said.

Despite the government goal, the handout has not been met with excitement by the public.

According to a joint poll conducted by the Sankei Shimbun and Fuji TV, 76.9 percent of the respondents said the payout is not appropriate economic policy.

One LDP lawmaker even said he and some of his colleagues have heard criticism of the plan in their home districts.

Information from Kyodo added