A Liberal Democratic Party panel began discussions Wednesday on reviewing the role and nature of government construction bonds to see whether they can be used to help finance a wider range of projects.
Members said they hope to reach some form of conclusion by mid-April, adding that their deliberations would focus on such points as shortening the time of redemption for the bonds, which currently stands at 60 years, and expanding their use to include projects other than traditional public works.
Some LDP lawmakers hope these bonds can be used to finance projects that have a short depreciation period such as optical fiber cables and installation of computers. The idea of reviewing the use of construction bonds was prompted by the Fiscal Structural Reform Law, which requires the government to stop issuing deficit-covering bonds by fiscal 2003, in effect limiting revenue sources for economic pump-priming measures such as income tax cuts.
In its next stimulus package, due by the end of the month, the party hopes to include steps to improve welfare, education and telecommunications, and some party members hope that construction bonds can be used to help finance these projects.
The Public Finance Law stipulates that state expenditures should be financed through revenue other than public loans or borrowings, but allows for the issue of construction bonds with Diet approval as a source of financing for "public works, government investments and loans."