A key advisory panel to Finance Minister Shoichi Nakagawa called Thursday for scrapping the ¥2 trillion cash benefit program intended to distribute at least ¥12,000 to each person in Japan to spur consumption and buoy the faltering economy.
The Fiscal System Council generally agreed that the government should review plans to use the ¥2 trillion because it doubts the program will be effective in lifting the economy, said Taizo Nishimuro, who chairs the advisory panel.
It is probably the first time that the panel, which advises the government on the budget compilation process, has criticized an already formalized government policy, Nishimuro said.
"Most of us wonder whether the cash payment program will be truly useful for the general public and for reinvigorating the economy. The ¥2 trillion could be used for other beneficial projects or to service Japan's government debt," said Nishimuro, who also chairs of Tokyo Stock Exchange Group Inc.
The controversial cash handout scheme is a major pillar of the ¥4.79 trillion second extra budget for fiscal 2008, which cleared the House of Representatives on Tuesday with majority support from the ruling parties.
The opposition-controlled House of Councilors could block passage of the supplementary budget, but under the Constitution, it would be enacted 30 days after clearing the Lower House even if the upper chamber were to oppose it.