Finance Minister Hikaru Matsunaga expressed support Tuesday for the large amount allotted to traditional public works spending in the government’s upcoming stimulus package, noting that such projects are needed in rural areas.
Speaking at a regular news conference, Matsunaga pointed out that earth-moving projects were still important in less-developed nonurban regions, and that public works outlays should be channeled to these areas. “It is important (for the government) to see to it that (the entire population) be able to enjoy a standard of living that is above a certain level,” he said.
The government is expected to unveil a pump-priming package Friday worth at least 16 trillion yen, of which 10 trillion yen will be in the form of fresh stimulative measures such as public works spending.
Matsunaga said the government will include funding for a wide range of new infrastructure projects such as those related to telecommunications and environmental protection, and that useless earth-moving projects will be closely reviewed. “But it is true that (traditional) public works spending immediately leads to additional jobs and boosts domestic demand,” he said.
On the issue of complaints that financial institutions are still exercising a tight lending policy, Matsunaga said his ministry will look into it and that he personally will talk with banking leaders in the next few weeks. “I will tell them that banks will become targets of public criticism if people believe the prolonged economic slump is the result of a so-called credit crunch,” he said.
During the news conference, Matsunaga expressed concern about the yen’s recent plunge against the dollar, saying the excessive fall of the yen is undesirable. “Sharp fluctuations in currency exchange markets are undesirable, and I hope currency exchange rates will remain stable,” he said.
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