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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