Japan’s Lower House OKs Extra Spending
TOKYO (AP) _ Japan’s lower house of parliament on Monday passed a 3 trillion yen ($25.4 billion) spending package aimed at creating tens of thousands of jobs this fiscal year, but analysts criticized it as too small to dispel the nation’s economic woes.
The package will go before the upper house as early as Thursday. Approval is virtually assured because the Liberal Democratic Party’s ruling coalition has a majority.
The supplemental budget calls for 1.5 trillion yen ($12.7 billion) for public works and another 1.5 trillion yen for ``safety net″ measures, such as assistance for small businesses, parliamentary spokesman Toru Kanno said. He did not give details on the new jobs that would be created.
As part of an accounting adjustment, the budget also sets aside 2.5 trillion yen ($21.2 billion) to cover an expected shortfall in tax revenues, though those funds technically aren’t dispersed.
The current fiscal year runs through March 31.
Analysts said fiscal stimulus alone cannot haul the world’s second-largest economy from a decadelong slump.
Japan is suffering from deflation _ continually falling prices that increase debt values, depress corporate profits and shrivel paychecks.
Prime Minister Junichiro Koizumi has vowed to push through reforms, and in recent months he has stepped up pressure on the nation’s banks to clean up their massive bad loans.
But while his fiscal policies have essentially capped government spending, he has yet to chip away at Japan’s swelling public debt.
Public debt is already pushing 140 percent of gross domestic product _ the total value of goods and services a nation produces a year _ the highest level for any industrialized nation. International ratings agencies have downgraded Japan’s credit rating in recent years because of the debt.