The labor ministry called on the government Tuesday to spend 931.4 billion yen out of a planned supplementary budget to fund employment-related measures and other welfare steps.

Of the requested amount, 753.6 billion yen should go to finance measures to help the jobless, including 196.8 billion yen for steps to expedite employment of jobless young, elderly and disabled people, the Health, Labor and Welfare Ministry said.

The administration of Prime Minister Junichiro Koizumi on Friday approved the compilation of the auxiliary budget, which is to include 1.5 trillion yen in safety net measures for companies and workers expected to be hit by moves to accelerate the disposal of bad loans.

But Chikara Sakaguchi, minister of health, labor and welfare, said Tuesday that 1.5 trillion yen will not be enough.

“It is necessary to secure a sufficient scale of budgetary appropriations to fund safety net measures to deal with the effects of bad-loan disposals,” Sakaguchi was quoted as telling a meeting of Cabinet ministers. “The amount proposed as part of the latest supplementary budget is inadequate.”

The stepped-up disposal of bad loans is expected to send many financially troubled companies into bankruptcy as banks tighten credit or cut off credit lines. This in turn will swell unemployment, according to analysts.

In its proposal outlined Tuesday, the labor ministry calls for setting aside 168.2 billion yen to provide subsidies to create jobs in districts hit particularly hard by increased joblessness and to provide subsidies to companies that adopt work-sharing arrangements.

It also calls for 21.7 billion yen to fund projects to identify proteins that trigger certain ailments, analyze the human genome and promote research on stem cells.

The ministry is also seeking 149.3 billion yen to alleviate problems associated with the rapid aging of the Japanese populace, and a combined 16 billion yen for financing construction of kindergartens and facilities for disabled children.

The plan also calls for 74.8 billion yen to finance construction of facilities for the disabled elderly.

METI wants 1 trillion yen

The Ministry of Economy, Trade and Industry plans to call for 1 trillion yen in safety net measures for small and midsize companies expected to be hit hard by plans to accelerate banks’ disposal of bad loans, ministry officials said Tuesday.

The ministry hopes the measures will be included in a proposed extra budget for the current fiscal year, the officials said.

The measures were presented to the ruling Liberal Democratic Party the same day for review.

Under the safety net plan, 700 billion yen is to be used to bolster the credit guarantee system for smaller firms to help them secure funds, the officials said.

Another 250 billion yen will be used to replenish the credit insurance system that supplements the credit guarantee system, while some 10 billion yen will be used to support startup firms and revitalize urban areas, the officials said.

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