The Cabinet on Friday approved a 5.677 trillion yen third supplementary budget for fiscal 1998, aimed at financing part of the government’s latest stimulus package, worth 24 trillion yen.
The extra budget features an outlay of 2.14 trillion yen for a set of measures to ease the credit crunch that has made it difficult for many small and medium-size companies to raise funds.
The Cabinet of Prime Minister Keizo Obuchi also approved a bill for freezing the belt-tightening Fiscal Structural Reform Law to pave the way for increased spending to rev up the dormant economy.
The budget and the bill will be debated during an 18-day extraordinary Diet session that convened later in the day.
The budget calls for the issuance of government bonds to raise 12.33 trillion yen to finance the stimulus package and make up for an expected tax revenue shortage of 6.88 trillion yen for the current fiscal year.
The issuance of the government bonds will bring the total sum of government bonds to be issued in fiscal 1998 to 34 trillion yen, marking a record 38.6 percent in state spending under the 1998 general account budget.
On spending, the budget also contains 3.96 trillion yen set aside for measures to improve the socioeconomic infrastructure, including 888.5 billion yen for promotion of information and telecommunications technologies and 626.9 billion yen for those related to welfare and education.
Under the budget, the government will also spend 769.8 billion yen for distributing 20,000 yen merchandise coupons, mainly to the elderly and families with children under 16, and 51 billion yen to promote economic rehabilitation of Asian nations.
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