Finance Minister Masajuro Shiokawa on Friday called on the Diet to quickly enact the 3 trillion yen supplementary budget so the government can support the flagging economy while pursuing structural reforms.

The extra budget for the current fiscal year, which includes 1 trillion yen for Prime Minister Junichiro Koizumi's structural reform proposals and steps to cushion reform-related pain, was submitted to the Diet earlier in the day.

The government hopes to have the package enacted on Thursday.

The extra budget focuses primarily on measures to improve the nation's worsening employment situation and accelerate economic structural reform. It differs from previous pump-priming packages, which were aimed at creating demand through funding public works projects.

"The economy is in a severe situation," Shiokawa told the Diet in his policy speech, "given the recent declines in exports, production, corporate capital investment and the worsening unemployment rate."

The extra budget allocates some 49 billion yen in fiscal outlays for antiterrorism measures in the wake of the Sept. 11 terrorist attacks in the United States and 26 billion yen for steps to deal with mad cow disease.

Of the 1 trillion yen earmarked for reform steps, 550 billion yen will be allocated for job creation measures and assistance for the unemployed. Some 251 billion yen will be allocated for supporting small and midsize companies.

To finance the extra budget, the government will issue 1.68 trillion yen in government bonds, bringing the total fiscal 2001 debt issues to 30 trillion yen. With that figure, Prime Minister Junichiro Koizumi will be able to deliver his bond cap pledge.

Second extra budget

The government may consider a second extra budget if the 3 trillion yen supplementary budget is insufficient, according to Chief Cabinet Secretary Yasuo Fukuda.

"We think it is important to first have (the Diet) deliberate the first supplementary budget thoroughly and seek its sound implementation," the top government spokesman said at a news conference Friday.

"But if, after that, there is a question of whether there is a need to take additional steps, a decision on that should be made while assessing the situation at the time," he said. "Prime Minister (Junichiro) Koizumi has said that if a situation arises in which such steps are necessary, we will deal with it in a flexible and bold manner.

"What is important is for us to make sure that structural reforms are spread and carried out. To that end, we will do our best," Fukuda added.

Some politicians in the ruling coalition have been calling for a second supplementary budget for the current fiscal year, claiming the first one is not sufficient to boost the ailing economy.