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On May 2, the first supplementary budget for fiscal 2011 was voted through unanimously by the House of Councillors and then enacted.
Prior to the vote, the Chair of the Committee on Budget in the House of Councillors, DPJ Diet member Takeshi Maeda reported on committee deliberations regarding the legislation. A summary of his report is as follows:
In the committee, questions were posed regarding, (1) the positioning of this supplementary budget in the ongoing process of working toward recovery and reconstruction of the areas affected by the Great East Japan Earthquake, (2) the government’s thoughts on forthcoming recovery and reconstruction efforts, (3) the reason why government bonds were not issued to provide financing this time, and (4) the effect that transferring a portion of pension funds for use as a source of revenue for the supplementary budget will have on pension finances.
In response, Prime Minister Naoto Kan and other Cabinet members made the following replies: (1) The first supplementary budget was basically conceived with the intent of being used in the immediate reconstruction phase. Special measures will be implemented to raise the percentage of state subsidies, and funds are to be appropriated for spending to take place within the current fiscal year, including disaster reconstruction related projects. (2) It is important to consider recovery and reconstruction in conjunction with the maintenances of fiscal discipline. Considering it is estimated that a large amount of government funds will need to be used for forthcoming reconstruction efforts, the government would like to create a thorough blueprint when drafting a second supplementary budget, and to consider amongst other things how to deal with the issue of finding sources of revenue. (3) Regarding the use of pension funds as sources of revenue, the government would like to ensure the long-term stability of pension funds by carrying out comprehensive tax system reform to guarantee revenue sources, and prevent public uncertainty regarding pension finances.
Following these questions and answers and the ensuing final debate, the committee voted to approve the legislation in its original form.
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