Japan’s government is considering spending ¥10 trillion ($107.4 billion) over the space of three years to support the job market, a move that could further worsen its dire public finances, a newspaper reported on Wednesday.
Under the scheme being floated by Prime Minister Taro Aso and some of his cabinet ministers, the government would spend around ¥3 trillion a year to create new job opportunities and help those seeking work, the Asahi daily said in an unsourced report. That sum would not come under the government’s budgetary ceiling for each fiscal year and could be funded by issuing new bonds, the paper said. Lawmakers have increasingly been calling for extra spending after Japan’s economy slipped into recession for the first time in seven years, with the global credit crisis hurting corporate revenues and the job market.
The ruling Liberal Democratic Party on Tuesday urged Aso to put off his plans for fiscal consolidation in light of the weak economy, Japanese media reported. Aso told reporters that while the government was sticking to its budget guidelines, it was also necessary to act flexibly to cope with a deteriorating economy. Putting the consolidation plan on hold would signal a major shift away from the government’s fiscal austerity policy, which was introduced in 2006 to deal with Japan’s huge public deficit. Japan has tightened public spending to rein in its public debt, by far the highest among industrialized nations at 150% of gross domestic product. (Reuters)