Hatoyama cabinet approves 2nd extra budget for FY 2009

I / Tokyo December 15, 2009, 13:35 IST

Japanese Prime Minister Yukio Hatoyama's Cabinet today approved an extra budget plan for fiscal 2009 to give an additional stimulus to the flagging economy.

The second extra budget for the year through March 31 will finance a fresh 7.2 trillion yen stimulus package, including employment subsidies, incentives for consumers to buy environmentally friendly products and expanded credit guarantees for small and mid size firms.

The budget draft will be submitted for approval to the regular diet session starting in January. The Cabinet endorsed a basic policy pursuing the goal of keeping issuance of new government bonds below around 44 trillion yen.

Amid the economic recession, tax revenue in the year starting in April will likely stay stagnant at around 37 trillion yen as in the current fiscal year, while the DPJ's two junior coalition partners, the Social Democratic Party and the People's New Party, are urging that the general-account expenditures reach at least 95 trillion yen.

The government said it will try to make the best use of non-tax revenue such as reserves in special accounts, instead of increasing issuance of new government bonds, to draw up the annual budget prioritising four areas -- child rearing, employment, environment and science and technology.