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Abe government to compile supplementary budget of ¥3 trillion or more

JIJI

The Japanese government will draw up a supplementary budget worth at least ¥3 trillion for fiscal 2015, sources said Friday.

If the government finds it necessary to prop up the economy, it will increase the extra budget’s size, the sources said.

For the budget, the government aims to use a surplus from the previous fiscal year and other funds and avoid issuing fresh government bonds for the current fiscal year to March, the sources added.

Prime Minister Shinzo Abe plans to guide the compilation of the extra budget during next month, according to the sources.

The budget will finance the first batch of measures to implement his key policy of building a society with more involvement by all citizens and parts of measures that the government will work out in November for domestic industries to be affected by the recently struck Trans-Pacific Partnership free trade deal.

Also included in the budget will be spending on public works for the reconstruction of areas hit by flooding in the Kanto and Tohoku regions in September.

Half of the ¥1.6 trillion surplus in fiscal 2014 will be used for government bond redemption and the rest, for the extra budget, according to the sources.

Drops in interest rates will leave funds left over from the budgeted interest payment expenditures, and a tax revenue surplus is expected for fiscal 2015, the sources said. A large-scale supplementary budget, however, will be difficult in light of the government’s fiscal reconstruction goal.

As Finance Minister Taro Aso has noted that the employment and income situations have been on a recovery path, the government now finds it unnecessary to implement economic stimulus measures.

If Japan’s preliminary gross domestic product data for July to September, due out on Nov. 16, show economic deterioration, calls might grow in the government and ruling bloc for a larger supplementary budget.