4 December 2001, 10:12 Japan LDP approves yr to March 2003 govt budget outline; several changes
TOKYO (AFX-ASIA) - Mitsuo Horiuchi, chairman of the Liberal
Democratic Party's general affairs council, said the party formally
approved the government's year to March 2003 budget outline, with some
changes.
However, he added that the party failed to approve the government's
mid-term economic and fiscal-policy outline, saying members need more
concrete data to assess the suitability of the plan.
Some members of the council criticised the outline as lacking
details on how to prevent large-scale unemployment in the face of
structural reforms and the severe economic situation, officials said.
The government will hold a Cabinet meeting this evening formally to
authorise the outline for the budget.
"The council approved the budget outline for next year after we
accepted some amendments by the government," Horiuchi told reporters
after a council meeting to discuss the plans.
"We delayed our approval of the mid-term outline because we judged
that there is still enough time to continue our study of the contents
of the plan. We see the draft outline as tentative. It is not completed
and lacks some data."
Tadahiro Matsushita, vice minister of the Cabinet Office, said that
some members of the council criticised the government's lack of
enthusiasm for measures to prevent increased unemployment.
Matsushita is also a member of the ruling LDP.
"Some members argued in the meeting that the council needs more
data, for example economic numbers that will be released in December
and January, to make a judgement on whether to approve the outline
finally," he said.
"In addition, some criticised the outlines for a lack of enthusiasm
in dealing with the challenge of a possible increase in unemployment,"
he said.
"The panel replaced the stated timing for the implementation of an
increase in healthcare contributions by salaried workers to 'when
necessary', " Matsushita said. The government originally wanted the
hike to start in April 2003.
Workers' contributions to healthcare, currently 20 pct of the total
payment, would be increased to 30 pct under the plan.
Other changes to the outline included the complete removal of a
plan to allow road-related tax revenue, particularly a tax based on the
weight of a vehicle, to be used for any spending, rather than limited
to road construction.
The revised plan also deletes the phrase "drastic cuts" from plans
to reduce assorted tax breaks offered to corporations and individuals.
On the other hand, the LDP panel pushed through a plan to introduce
a consolidated company-tax system, without first dealing with the issue
of how the resulting 800 bln yen revenue gap would be filled.
The government has previously argued that an additional tax will
have to be levied on companies to make up the difference but this has
raised opposition from members of the ruling coalition.
"The council effectively cleared the way for the government to
introduce a consolidated corporate-tax system from April, even without
immediately studying how to cover the resulting revenue shortfall of
800 bln yen," Matsushita said.
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