The Liberal Democratic Party-New Komeito ruling bloc passed the ¥88 trillion fiscal 2009 budget bill and related legislation Friday through the Lower House, paving the way for implementing the biggest initial budget ever by the March 31 end of the fiscal year.
Although the budget bill will almost certainly be voted down by the Upper House, which the opposition parties control, Article 60 of the Constitution gives the House of Representatives the authority to override the upper chamber if no consensus can be reached within 30 days.
Prime Minister Taro Aso has said repeatedly that the government aims to boost the economy with a “three-stage rocket,” referring to the fiscal 2009 budget on top of the two extra budgets for fiscal 2008.
Aso told reporters after the bills’ passage that his focus is now on ensuring that the budget and related bills are enacted to effect the emergency economic measures.
“As I have been saying all along, the enactment of the budget, including the extra budget, is the best economic measure,” Aso said.
The bills to finance the second extra budget, including the ¥2 trillion in handouts, are expected to clear the Diet next week.
With the enactment of the fiscal 2009 budget secured, members of the ruling bloc have begun calling for further economic measures to deal with the ongoing global financial crisis and the sharply deteriorating unemployment situation.
But Aso said the government will not consider additional measures while the budget and related bills are being deliberated in the House of Councilors.
“Now is not the time for the government to talk (about additional measures),” Aso said.
The current measures in play — the budget and two extra budgets — include the controversial ¥2 trillion in cash handouts, a tax cut on home mortgages and ¥1 trillion for local government job-creation efforts. However, opposition leaders argue these steps will fall short.
“Discussion at the Lower House Budget Committee made clear the fiscal 2009 budget does not match the scale of the current economic crisis,” Naoto Kan, acting president of the Democratic Party of Japan and a member of the committee, said Thursday.
Kan trumpeted instead DPJ policies, including compensating farmers forced to sell their products below cost and eliminating all expressway tolls.
Of the ¥12 trillion in fiscal spending, Kan said it is “not only too small but also ineffective” and dismissed the chances of the ¥2 trillion cash handout plan lifting the economy.
Even as the budget makes its way through the Diet, some ruling bloc members have already begun to speak of the need for an extra budget for fiscal 2009.
Opposition leaders are calling this an admission of the budget’s inadequacy. In early February, the secretaries general of three opposition parties — Yukio Hatoyama of the DPJ, Hisaoki Kamei of Kokumin Shinto (People’s New Party) and Yasumasa Shigeno of the Social Democratic Party — will urge the ruling bloc to revise the fiscal 2009 budget if they believe another extra budget is needed.