The government needs to extend its 10-year plan for 630 trillion yen in spending on public works projects instead of trimming the amount, members of the Conference on Fiscal Structural Reform agreed April 21, according to government officials.

The study group, made up of senior members of the ruling Liberal Democratic Party and its two non-Cabinet allies as well as former prime ministers and finance ministers, agreed that annual spending for public works must be reduced to help rebuild the nation’s debt-ridden fiscal health. Last month, Prime Minister Ryutaro Hashimoto instructed the group to review and “cut back sharply” all long-term government programs, including the public works program. Also included is a 6.01 trillion yen agricultural spending package started in fiscal 1995 to help farmers ride out the negative effect of the Uruguay Round agreement on liberalizing agricultural trade.

Former Prime Minister Noboru Takeshita and other members suggested that the fiscal 1995-2004 public works program be extended by three years, the official said, adding that no consensus was reached on the number of years. Former Finance Minister Masayoshi Takemura called on the government to set a stricter target in cutting public-works project costs than the 10 percent in three years recently announced.

Some members pointed out that the planned agricultural spending package has not necessarily been used for projects directly related to agriculture but for other areas such as construction of entertainment facilities in farming villages. Regarding the handling of debts left by the now-defunct Japanese National Railways, some members proposed creation of a special tax to help pay the debts, according to the officials.

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