With a record 81.86 trillion yen budget for fiscal 1999, the government is determined to put an end to the prolonged economic slump. But both the general public and those in the business community still worry about the nation’s fiscal health.
The draft budget approved Monday by the Cabinet includes public works spending worth 9.9 trillion yen, an 11 percent rise from the initial fiscal 1998 figure. Among various business sectors, general contractors will probably be the first to benefit from such generous spending on public projects.
Yet even some of those who should be showing the greatest gratitude, it would seem, are questioning the government’s decision to further increase its fiscal debts. “Surely the government is doing this to boost the economy. But as a citizen of this country, I cannot help but wonder whether we should let the government’s debts swell to this point,” a general contractor executive said.
In an about-face from the austere initial budget for fiscal 1998, the government has allowed massive spending on public works, putting priority on stimulating the economy.
The Construction Ministry is hopeful of the impact, noting public works projects are more efficient than tax reductions to boost the economy and generate jobs, especially in local areas.
General contractors, however, are not very impressed. Some in the industry point out that increased public works projects will not compensate for the huge drop in orders from the private sector.
The financial woes symbolized by the recent failures of Long-Term Credit Bank of Japan and Nippon Credit Bank have meanwhile yet to be wiped out, and companies in other sectors still find themselves restructuring.
With the jobless rate resisting any fall from its postwar high, the government plans a host of measures to help displaced workers land new jobs.
The proposed fiscal 1999 budget includes 3.15 billion yen to set up the Hello Work Information Plaza — a facility where job seekers can use computers to search for offers — in each prefecture.
The government also plans to allocate some 400 million yen for the ongoing construction of a five-story high-tech facility in Tokyo’s Roppongi district to house a center to provide comprehensive support for job-hunting students. The facility opens next fall.
The Ministry of International Trade and Industry is seeking 4.1 billion yen to extend low interest rate loans through People’s Finance Corp. to salaried workers who seek to start up new businesses.
The scheme, part of the government’s efforts to ease the ongoing credit crunch, will effectively expand the scope of borrowers of governmental money without collateral, now limited to self-employed people.
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