Disaster-struck Japan set for record-high spending
Saturday, December 24, 2011
TOKYO (AP) — Disaster-struck Japan is headed to record-high budget spending of 96 trillion yen ($1.2 trillion) as the nation tackles the costs of recovery from the March earthquake and tsunami.
The Cabinet approved the draft budget for the fiscal year starting April 2012 on Saturday, covering massive costs for disaster reconstruction in northeastern Japan as well as decontamination efforts for radiation leaked from a tsunami-damaged nuclear power plant.
The government will rely on new debt for 49 percent of its annual revenue, the highest level ever, according to Kyodo News service.
Japan’s ballooning public debt is expected to renew the push from the government to raise the consumption — or sales — tax, now at 5 percent, a move certain to meet resistance from a public disenchanted with what some have criticized as wasteful spending favoring bureaucrats.
“Unless we do a fundamental review of the tax system, we are reaching our limit in trying to maintain our welfare services,” Finance Minister Jun Azumi told reporters.
Japan is reducing its spending for developing atomic energy. But it will need to spend far more than the amount saved to safely close down Fukushima Dai-ichi nuclear power plant, which went into meltdown following the disasters.
Damage from the March 11 disasters is estimated at between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion), according to Japan’s Cabinet Office, making it the world’s most expensive natural disaster ever.
That number doesn’t include the cost of the nuclear crisis, including evacuation, decontamination and damage expenses.
Japan’s rapidly aging society has also pushed up spending as the government burden rises for the national pension plan.