Japan??s cabinet on Tuesday agreed Y7,200bn ($80.6bn) in stimulus spending intended to shore up a fragile economic recovery with measures including support for employment, easier financing for smaller companies and promotion of environmental protection.
A government statement said the package included Y3,500bn ($38.9bn) in new spending to be directed at ??supporting the regions?, Y800bn ($8.9bn) for environmentally related policies, and Y600bn ($6.7bn) for promoting employment.
About Y2,700bn ($30bn) in funding for the new package is expected to come from spending trimmed from a previous stimulus budget announced by the former ruling Liberal Democratic party before its defeat in August??s general election.
While the government also hopes to tap contingency funds it gave few details of funding for the package beyond saying that it would ??do its utmost? to avoid new bond issuance. Hirohisa Fujii, finance minister, said the extra Y100bn added to the package since Friday -the size of the previously planned package was Y7,100bn- would be financed through the issue of special construction bonds.
Japanese government bond sales for the current fiscal year are now expected to total more than Y53,000bn ($588.9bn), far exceeding tax revenues of about Y37,000bn ($411.1bn), Mr Fujii told journalists. However, he said he stood by plans to limit new bond issuance in the year from April 2010 to less than Y44,000bn ($489bn).
??Japan??s fiscal situation is very serious,? Mr Fujii said.
