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Speech on Fiscal Policy by Minister of Finance Shiokawa at the 156thSession of the National Diet

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Speech on Fiscal Policy byMinister of Finance Shiokawa 
at the 156th Session of the National Diet

January 20, 2003
 
     In line with the previously approved Program toAccelerate Reforms, the Government has prepared the Supplementary Budget forFiscal Year 2002 (Article One of the General Account, Article One of the SpecialAccount, and Article One of the Budgets of Government Agencies). Beforerequesting Diet deliberations, I would like to briefly outline the SupplementaryBudget.
 
(Program to Accelerate Reforms)
     First, I would like to focus on the Program toAccelerate Reforms, which was approved in December last year.
 
1. Although movements towards an incipient recovery continue to be seen inthe economy, the pace of this recovery has become more moderate. Moreover, it isnecessary to take all possible measures against the impacts that will emerge inthe process of accelerating the disposal of non-performing loans.
 
2. In these circumstances, the Government approved the Program to AccelerateReforms to complement and reinforce the Comprehensive Measures to AccelerateReforms, which was compiled in October last year.
 
3. The Program incorporates  i) “the building of safety nets inpreparation for the economic and social structural transformation,” centeringon strengthening employment measures, expanding measures for small andmedium-sized enterprises, supporting entrepreneurship and new businessstart-ups, establishing a fair and secure society addressing the aging societyand the declining birthrates, and  ii) “the encouragement of publicinvestment promoting structural reform,” centering on promoting urbanrenaissance efforts and the upgrading of the urban functions that encourage suchefforts, providing infrastructure geared toward attractive cities and regionalrevitalization, responding to environmental problems and other urgent issues.
 
(Outline of the FY2002 Supplementary Budget [Article One of the GeneralAccount, Article One of the Special Account, and Article One of the Budgets ofGovernment Agencies])
 
     Next, I will outline the FY2002 SupplementaryBudget (Article One of the General Account, Article One of the Special Account,and Article One of the Budgets of Government Agencies) that we have submitted tothe Diet.
 
1. As for expenditures, with regard to the Program to Accelerate Reforms,the government will allocate a total of 3 trillion yen―1.5 trillion yen formeasures to strengthen safety nets in preparation for the economic and socialstructural transformation and 1.5 trillion yen for measures to promote publicinvestments that contribute to structural reform. Furthermore, the governmentwill reduce the local allocation tax grants by 532.5 billion yen, appropriatebudget for any particularly urgent and pressing items such additionalnon-discretionary expenditures and measures for disaster relief, and retrenchexisting expenditures and reserve funds.
 
2. In regard to revenues, this Budget expects tax revenues to decrease by2.54 trillion yen in view of the actual tax revenues received to date andnon-tax revenues to increase.
     As a necessary measure to cover the deficiency ofrevenues resulting from the above measures, the government will implement anadditional issuance of government bonds worth 4,968 billion yen. This willincrease the government bond issuance in fiscal 2002 to 34,968 billion yen andthe bond dependency rate of the current budget to 41.8%.
     As a result, the total FY2002 General Account Budgetafter Supplementation will be 83,689 billion yen, an increase of 2,459 billionyen in both expenditures and revenues from the Initial Budget.
 
3. In connection with the above budgetary supplements to the GeneralAccount, supplements to the Special Account and the Budgets of GovernmentAgencies will also be necessary.
 
4. As for the Fiscal Investment and Loan Program, a total of 114.4 billionyen will be added to seven agencies, including the Development Bank of Japan, inorder to implement the measures incorporated in the Program to AccelerateReforms.
 
5. This concludes my outline of the Supplementary Budget for FY2002.
     This Supplementary Budget has been formulated in orderto promptly implement the Program to Accelerate Reforms, incorporating measuresthat need to be taken urgently in line with the acceleration of structuralreforms and measures that directly contribute to containing deflation. 
     I hereby request that you deliberate on the DraftBudget and promptly give your approval.

 

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