TOKYO (AFX-ASIA) - State Minister for Economic and Fiscal Policy Heizo Takenaka said the government cannot boost spending to try to prop up the economy in the near-term. "At present, the government is in a difficult situation to take short-term policy to boost spending to help prop up the economy," he told an Upper House committee meeting. "We are taking a narrower path, such as economic reforms." He added: "For the moment the economy is encountering further weakeness due to the impact from the U.S. so we have to cautiously monitor how the U.S. economy affects Japan." Takenaka denied recent media reports that the government may suggest the introduction of a flat-rate tax system to help boost the economy. "The flat-rate system is unlikely to become government policy," he said.