Plan to freeze part of extra budget OK’d

Hatoyama moves to alter spending plans

Kyodo News

Prime Minister Yukio Hatoyama’s government formally adopted a basic policy Friday to suspend part of the supplementary budget for 2009 in order to swiftly work on his promise to re-prioritize the spending plans of his predecessor’s budget.

The government also decided to set up two key bodies soon that the Democratic Party of Japan has advocated creating — an Administrative Reform Council and the National Strategy Office, which will later be turned into a National Strategy Bureau — to begin acting on the goal of asserting greater political control over the bureaucracy.

At a Cabinet meeting, Hatoyama told ministers to review all spending projects earmarked in the extra budget to see which should be suspended and to report the results to a Cabinet committee by Oct. 2, Chief Cabinet Secretary Hirofumi Hirano told a news conference.

The prime minister, in particular, ordered temporary suspensions for projects, excluding those intended for local governments, used to finance the building and maintenance of ministry and agency facilities, Hirano said.

Economy, Trade and Industry Minister Masayuki Naoshima told a separate press conference that the Eco-point incentives for consumers’ purchases of environment-friendly goods would be exempted from the suspension.

Defense Minister Toshimi Kitazawa, meanwhile, said the new government will suspend public spending on noise insulation work in housing near U.S. military and Self-Defense Forces facilities to verify its urgency.

Of the ¥130.4 billion allocated to the ministry in the extra budget, Kitazawa said the government will suspend the implementation of some ¥60 billion earmarked for work to “stably manage” U.S. military and SDF bases as well as for procuring environment-friendly vehicles for the SDF and televisions to receive terrestrial digital broadcasting.

Of the extra budget incorporating projects worth some ¥15.3 trillion, excluding tax cuts, money that has not yet been spent because specific outlays have yet to be determined accounts for about ¥8.3 trillion, according to the Finance Ministry and other sources.

The Hatoyama administration envisions suspending projects that would not serve well as pump-priming measures, including a project to build a national media arts center, dubbed an animation hall, and to refurbish government buildings.

The extra budget was formulated by the previous administration of Taro Aso as a way to stimulate Japan’s economy.

A number of prefectural governors have expressed objections to the suspension initiative, saying provincial areas have suffered more severely than urban areas from the economic slump.

The council intends to get rid of government spending deemed wasteful to make room for new spending proposals, while the office, which will be created within the Cabinet Secretariat, is aimed at devising basic policies on the contours of taxation and finance and of the country’s economic management.

Yoshito Sengoku, state minister for administrative innovation, indicated Thursday that the council would soon begin business in earnest to choose projects to be frozen in cooperation with other ministries and agencies.

Any money made available through the planned suspension of part of the extra budget is to go toward realizing the DPJ’s key initiatives, such as subsidies for child-rearing families and toll-free expressways.

Hatoyama’s DPJ won a landslide victory in a general election late last month, wresting control of the government from the long-ruling Liberal Democratic Party.

The DPJ has pledged to review the supplementary budget for the current fiscal year compiled by the previous administration led by the LDP, with the aim of suspending part of the allocations and diverting them for the new administration’s key policy items.