Reuters: Market News: Japan govt OKs $43 bln stopgap budget for 2012/13

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Japan govt OKs $43 bln stopgap budget for 2012/13 Mar 29th 2012, 00:40 TOKYO, March 29 | Wed Mar 28, 2012 8:40pm EDT TOKYO, March 29 (Reuters) - Japan's government approved a stopgap budget worth $43 billion on Thursday to cover the first week of the fiscal year from April 1 due to a delay in passage of the main annual budget, illustrating its struggle to legislate in a split parliament. The temporary budget, the first of its kind in 14 years, was compiled as it became clear that the full budget would not be approved before the start of the new fiscal year amid opposition stonewalling in parliament, boding ill for the passage of the government's unpopular plan to double the 5 percent sales tax. The provisional budget totalling 3.6105 trillion yen ($43.43 billion) is aimed at covering minimum administrative spending needed until April 6, when the main budget comes into force. The bulk of it will be covered by issuing financing bills, but it entails no new additional bond issuance. The main budget will be enacted even if rejected by the opposition-controlled upper house, because the lower house can override the upper chamber on budget issues. The upper house has dragged its feet and is yet to vote on the main budget, but it will come into force regardless on April 6, which is 30 days after passage by the lower house. Prime Minister Yoshihiko Noda's cabinet plans to approve on Friday its plan to double the sales tax to 10 percent by late 2015 and submit it to parliament. But Noda has yet to find a way to win backing from the opposition, which has threatened to block the tax hike bills so as to force an early election, as they need approval from both chambers. Underscoring the gravity of Japan's huge debt challenge, nearly half of next fiscal year's 90.33 trillion yen budget will have to be financed by new borrowing. Public debt is twice the size of Japan's $5 trillion economy, the worst among industrial nations. Link this Share this Digg this Email Reprints

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