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2012 budget enacted

In the evening of April 5, three pieces of legislation for the fiscal 2012 budget (budgetary funding for the general account, special accounts, and government-related institutions) of approximately 90.3 trillion yen were enacted.

Earlier in the day, the budget was rejected by the House of Councillors in a plenary session started at 1 pm, with 129 votes against and 110 votes in favour. In accordance with Article 60 paragraph 2 of the Constitution, and Article 83-II paragraph 3 and Article 85 paragraph 1 of the Diet Law, the budget was sent back to the House of Representatives, and then the House of Representatives called for a meeting of a joint committee of both Houses. As the both sides were unable to reach an agreement, the decision of the House of Representatives became the decision of the Diet.

Within the budget, a Great East Japan Earthquake Special Account has been established in order to ensure that reconstruction efforts can proceed continuously and at full throttle. Furthermore, 1 trillion yen’s worth of “measures that focus on Japan’s revitalization” are to be implemented, and budgetary funds distributed in order to achieve the true revitalization of our national economy. In addition, by ensuring that “proposal-based policy screening” and similar measures are appropriately reflected in the budget, and strictly eliminating wasteful spending in the public sector, we can make sure that the “medium-term fiscal framework” (spending within the framework of 68.4 trillion yen, and issuing new government bonds to the amount of 44 trillion yen) can be strictly followed and achieve a better balance in allocation of budgetary funds. In addition to securing 2.3 trillion yen (includes 1.3 trillion yen from the national treasury) for an allowance for children now named the “Child Support Allowance”, funds to continue the measures to make tuition free for high school students in practice and to provide individual household income support for farmers were secured. In addition funding for Local Allocation Tax, the implement and promotion of energy conservation and renewable energy, measures to eliminate the waiting lists for childcare facilities and the Okinawa development budget was enhanced.

The Great East Japan Earthquake Special Account posted approximately 3.2 trillion yen of Great East Japan Earthquake related expenditures. The special account will be funded by revenues of approximately 530 billion yen from reconstruction tax, 550 billion yen from the general account, and 2.6 trillion yen from reconstruction bonds.

Prior to the vote at the session of the House of Councillors, DPJ Diet member Yoshihiro Kawakami argued in favour of the budget, citing the following four reasons: the budget 1) targets disaster reconstruction, 2) will lead to revitalization of society and economy, 3) reflects recommendations from the “proposal-based policy screening” group, and 4) has been developed with sufficient consideration to fiscal discipline.

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