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Business
Fiscal Hawks Still Flying
Tuesday, July 20, 2010
Hawk
Tokyo -- The heavy defeat of the DPJ in the July 11 elections does not seem to have deterred the senior leaders of the Kan administration in their determination to get Japan's fiscal house in order.
As per previous announcements, the government expects to cap the issuance of government bonds in FY2011 to 44 trillion yen (about US$480 billion), and then steadily decrease the amount thereafter.
The Cabinet approved a plan today to cap the general-account FY2011 budget at 71 trillion yen (about US$775 billion).
Finance Minister Yoshihiko Noda, one of the leading deficit hawks, indicates that he intends "drastic changes" in budget allocations.
Areas expected to have economic growth potential - environment, health care, and tourism - will not be hit as hard as other departments.
Cabinet ministers are likely to be tasked with finding programs within their own ministries which can be trimmed or cut, perhaps as much as 10%.
Transport Minister Seiji Maehara, however, is among a number of cabinet ministers who are resisting this plan.
Reading between the lines, these ambitious moves seem to demonstrate that Naoto Kan does not intend to step down and still intends to move forward with the basic policies he advocated before the elections.
PanOrient News
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