UPDATE2: Japan's Diet enacts FY 2012 extra budget amid divided Diet.
(EDS: UPDATING WITH DETAILS, ABE'S REMARKS, UPDATE3 TO FOLLOW)
Japan's parliament on Tuesday enacted a 13.1 trillion yen ($140.7 billion) supplementary budget for fiscal 2012 to finance a stimulus package aimed at pulling the economy out of deflationary recession, with some support from opposition party lawmakers.
The budget, the second largest of its kind, was approved 117-116 at a plenary session of the House of Councillors, where the Liberal Democratic Party, headed by Prime Minister Shinzo Abe, and its coalition partner the New Komeito Party lacks a majority.
"The margin of one vote indicated a big step toward decisive politics from indecisive politics," Abe told reporters at the prime minister's office late Tuesday. "I believe the passage of the extra budget will help us accelerate efforts to end deflation."
The Japan Restoration Party and the People's New Party, as well as some other opposition lawmakers, voted for the budget drafted by Abe's government, formed Dec. 26, believing that the stimulus package would contribute positively to the broader economy, while taking into account his Cabinet's high public approval ratings.
The main opposition Democratic Party of Japan, defeated by the LDP at the general election last December, and several other opposition parties voted against, arguing the stimulus steps crafted by the ruling camp rely heavily on unnecessary public works projects.
The supplementary budget is the biggest since fiscal 2009, when the LDP-led government of then Prime Minister Taro Aso compiled a 14.7 trillion yen extra budget to fund pump-priming measures in the wake of the global financial crisis triggered by the collapse of U.S. investment bank Lehman Brothers Holdings Inc.
The latest economic stimulus package entailing 10.3 trillion yen of central government funds, endorsed by Abe's Cabinet last month, is expected to add around 2 percentage points to Japan's real economic growth and create at least 600,000 jobs, according to the government.
To cover the shortfall in revenue required to pay for the supplementary budget for the year ending March, the government plans to issue an additional 7.8 trillion yen in bonds, sparking concern that Japan's fiscal health, already the worst among major developed nations, could deteriorate further.
The more powerful lower house approved the extra budget earlier this month.
Late last month, Abe's Cabinet approved a record-high 92.61 trillion yen initial general-account budget for fiscal 2013 starting April.
With the two budgets covering financing needs for a total of 15 months, the government led by the LDP, which returned to power in December following three years in opposition, will aim to implement economic steps, dubbed "Abenomics," in a seamless manner.
Flexible fiscal spending is among the key policies Abe calls the "three arrows" -- along with an aggressive monetary policy and growth strategies -- that the government plans to flesh out by the middle of this year.
Amid mounting hopes for economic recovery, the Abe Cabinet's approval rating has risen to 72.8 percent, a Kyodo News survey showed Sunday, exceeding the 70 percent line for the first time since September 2009, when the government of then Prime Minister Yukio Hatoyama, the DPJ's first administration, was launched.
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|Publication:||Japan Policy & Politics|
|Date:||Mar 4, 2013|
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