¥3 trillion stopgap budget is fast-tracked

Kyodo

The Cabinet of Prime Minister Yoshihiko Noda on Thursday submitted a ¥3.61 trillion stopgap budget for fiscal 2012 to cover spending for the first six days of April, after the ruling and opposition parties failed to agree on a full-scale budget.

The urgently prepared budget, the first of its kind in 14 years, is expected to clear both Diet chambers Friday. The provisional budget will cover the shortest period ever. The previous record was eight days, set in fiscal 1988.

Finance Minister Jun Azumi said after the Cabinet approved the draft budget that the government should not leave even a single day blank for budget implementation.

“As the Japanese economy is about to turn upward, we drew up (the budget) in order not to hamper” the momentum, Azumi said.

The rare arrangement came after Noda’s Democratic Party of Japan failed to win approval from opposition parties, which control the Upper House, for the initial ¥90.33 trillion budget before the current fiscal year ends Saturday. The stopgap budget is equivalent to some 4 percent of the full-scale budget.

The opposition parties, justifying their blocking of the initial budget, have said they need more time to discuss it, while the move also reflected their stance against Noda’s fiscal policy, including planned consumption tax hikes starting in 2014, which they say may not be necessary if the government proceeds further with its spending cuts.

But the blocking will not have a long-term impact because the initial budget will automatically enter into force on April 6 without approval from the Upper House, given the precedence under the Constitution of decisions by the Lower House, where Noda’s ruling coalition is dominant. The Lower House approved the initial budget earlier this month.

However, being forced by the opposition to take such an emergency measure is widely seen as a blow to Noda’s political credibility at a time when he is struggling to win support for the tax hike even within his own party, where some members are critical of his advocacy of a policy deeply unpopular with voters.

Under the stopgap budget, the biggest share, or ¥3.19 trillion, will go to local governments.