The Cabinet approved drafts Monday for a fiscal 1998 supplementary budget, with actual spending reaching 6.1 trillion yen, and a bill for revision of the Fiscal Structure Reform Law to initiate an economic stimulus package worth more than 16 trillion yen.
These and other related bills, including those for tax cuts, were submitted to the Diet later in the day so that they can be passed by mid-June.
The extra budget for fiscal 1998, which started April 1, includes 4.6 trillion yen in general-account appropriations. Actual fiscal spending, including tax cuts, totals 6.1 trillion yen.
The tax cuts comprise 1.4 trillion yen in income tax cuts and 600 billion yen in residential tax cuts for a total of 2 trillion yen. These cuts will be added to another 2 trillion yen in tax cuts included in the fiscal 1997 supplementary budget.
The fiscal 1998 supplementary budget includes 3.57 trillion yen for public works -- 3.4 trillion yen for infrastructure improvement, including advanced telecommunications facilities and environmental protection programs, and 170.2 billion yen for postdisaster reconstruction projects.
Among other features, the budget contains 413.5 billion yen to stimulate transactions in real estate held by financial institutions as collateral, 297.2 billion yen for lending to small companies and 152.9 billion yen in extraordinary payments to the socially weak.
Most of the budget will be financed by issuing government bonds, including 4.1 trillion yen in construction bonds and 2.01 trillion yen in deficit-covering bonds to cover tax reductions.
Deficit-covering bond issues under the supplementary budget will increase the issuance of such bonds by 622 billion yen over fiscal 1997, although the government initially planned a reduction of 1.4 trillion yen for fiscal 1998.