Reforms have reduced by some 32 percent the estimated amount of funds the government needs to inject into 31 public corporations from its fiscal investment-and-loan program to complete existing projects, according to a government-commissioned report released Tuesday.
Coupled with lower interest rates, the amount the government needs is estimated at 7.51 trillion yen, according to the report compiled by a Fiscal System Council subcommittee. The figure is down 3.54 trillion yen from last year’s estimate of 11.06 trillion yen.
Of the 31 entities under the fiscal investment-and-loan program, or FILP, Japan Highway Public Corp. needs 1.79 trillion yen over the next 46 years, instead of the 3.46 trillion yen over 51 years estimated last year, the report says.
The reduction is due mainly to a halt in the funneling of 300 billion yen a year for highway construction projects, a pledge Prime Minister Junichiro Koizumi made last fall. The cut was not reflected in last year’s report because it was released in June.
The report released Tuesday says the government needs to inject 942 billion yen over the next 21 years into Japan National Oil Corp., instead of the 1.82 trillion yen estimated last year, also due to reforms carried out since the last report.
But the report also says changes in factors such as revenues and interest rates could alter the estimate.
It says that if Japan Highway Public Corp. suffers a 10 percent loss in revenues from its core business, it will need an additional 915.3 billion yen.
An additional 282.3 billion yen must go to Japan National Oil Corp. if interest rates rise 1 percent, according to the report.
The council, an advisory panel to the finance minister, estimated necessary amounts of tax money for 33 public corporations under the program last year. Since then, those under the program have been reduced to 31.
“We need to figure out ways to use this analysis effectively . . . including ways to reflect it in the budget-compilation process and ways to use it as an incentive for public corporations to increase their efficiency,” Osaka University professor Masaaki Homma, head of the subcommittee, said at a news conference Tuesday.
FILP, known as “zaito,” is often called the second budget due to its immense size.
It is financed mainly by postal savings and public pension premiums, and is designed to channel the funds via the Trust Fund Bureau of the Finance Ministry to governmental and public institutions for investment projects, loans and aid.
The government revamped FILP in April 2001 into a leaner, market-oriented system, paving the way for public corporations financed by the program to raise funds by issuing their own bonds without government guarantees.
The reform also eliminated FILP funding for projects that can be developed by the private sector.
Record debt in 2001
The Japanese government’s outstanding debt totaled 607.31 trillion yen to the end of fiscal 2001, up 12.8 percent from a year earlier, the Finance Ministry said Tuesday.
The debt, to March 31, included 448.16 trillion yen in government bonds, up 17.7 percent.
The remainder consisted of 109.55 trillion yen in loans, down 0.5 percent, and 49.60 trillion yen in short-term debt-financing bills, up 4.1 percent.
The ministry also said the outstanding balance of government-guaranteed debt rose 1.5 percent to 58.65 trillion yen.
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