The government will finance its planned spending of around ¥6 trillion from fiscal 2016 for reconstruction in Tohoku areas hit by the 2011 earthquake-tsunami disaster without any new tax hikes or selling off assets, according to sources.
The budgeting reflects the Abe administration’s desire to promote fiscal consolidation and could trigger a backlash from disaster-hit municipalities that are slated to shoulder part of the spending.
The government expects that economic improvement will increase its tax revenue and the already earmarked budget will not be used up, eliminating the need to raise money for reconstruction, the sources said Sunday.
The administration does not plan an additional sale of government shareholdings in Japan Tobacco Inc. to pay for rebuilding projects planned over the five years from fiscal 2016, the sources said.
The government has designated a 10-year period through March 2021 as the recovery period. For the five-year term through March 2016, the government has allocated ¥26.3 trillion for reconstruction.
The local governments have been asked to partially shoulder the costs. The central government will present the fiscal 2016-2020 financing plan to local governments and finalize the framework for it by the end of June.