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As the Diet continues deliberations on the ¥14 trillion supplementary budget for fiscal 2009 and related bills, it needs to scrutinize the content of the huge extra budget. When the fiscal 2009 main budget and the supplementary budget are combined, the total budget size will top ¥100 trillion for the first time. Accordingly, the nation’s debt will snowball because the government has to rely on an issuance of national bonds to finance the budgets.

While measures to stimulate the economy are necessary, the government should bear in mind that its mounting debts will have to be paid back by future generations, and should refrain from lax spending.

A problematic feature of the fiscal 2009 supplementary budget is that it allocates as much as ¥4.36 trillion — about 30 percent of the budget — to 46 funds, 30 of them to be newly established. The fundamental principle of a budget is that money must be used in approved ways over a single year. The government, however, says that money in funds can be used “flexibly” for a longer period. This is troubling because the money allocated in this manner would, for all practical purposes, resemble a giant slush fund.

The ¥4.36 trillion includes some ¥700 billion for vocational training and livelihood support for jobless people, some ¥310 billion for improving medical services in rural areas and some ¥300 billion for farmland consolidation.

In many cases, government ministries and agencies simply asked for money for funds without working out concrete projects to implement policies. The possibility cannot be ruled out that bureaucrats will come up with claptrap projects just to use up the money. Since there is no legal obligation to report every year on how the money put in funds has been used, there is a real danger that the money will be used in a wasteful manner.

The Democratic Party of Japan also points out that nearly ¥3 trillion of the supplementary budget is earmarked for use by independent administrative agencies and public-service corporations where about 900 former bureaucrats now work.

Lawmakers should press the government to clarify how money put in those funds will be used.

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