30 August 2001, 12:08  LDP's Kamei proposes extra 30 trln yen in public works spending to PM

TOKYO (AFX-ASIA) - Liberal Democratic Party faction leader and former policy chief Shizuka Kamei said that he proposed to Prime Minister Junichiro Koizumi that the government spend an extra 30 trln yen on public works. Kamei is a key LDP faction leader and backed Koizumi in the party presidential elections that brought the premier to power. The proposed additional spending would help boost growth to an annual 3.0 pct, he told a meeting of political commentators, as well as help Japan catch up with the levels of infrastructure seen in the US and Europe. "The government should not raise spending for unnecessary public works projects but it is justified on desperately needed projects to catch up with levels of social assets in the US and Europe," Kamei said. "I put forward an economic rescue plan to the prime minister last Friday, including an extra 30 trln yen in spending covered, not by deficit-covering bonds, but construction bonds," he told AFX Asia after the meeting. "The spending increase would begin with a planned supplementary budget and continue in upcoming budgets and that should eventually bring economic growth to an annual rate of 3 pct," he said. "The prime minister said he would like to study the plan," he added. "The Bank of Japan should make efforts to guide prices higher using all possible measures but it will not be enough to resolve deflationary pressure," Kamei told the political meeting. "Fiscal stimulus measures are desperately needed to boost domestic demand. The government should take measures to boost economic growth before it addresses fiscal reforms," he said.

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