The Cabinet of Prime Minister Naoto Kan agreed Tuesday on a draft ¥2 trillion second extra budget for fiscal 2011 that would finance relief work following the March earthquake and tsunami, including health checks on people affected by the Fukushima nuclear plant crisis.
The government plans to submit the draft budget and related bills to the Diet on July 15, eyeing possible passage before the end of the month, officials said. It will not issue any new debt to create the budget, instead tapping the surplus funds of the previous year.
The first supplementary budget for the year through next March was worth ¥4.02 trillion and was aimed at helping to rebuild parts of the northeast devastated by the disaster, while the government is expected to soon start drafting a third budget that would be even larger than the first two.
The biggest item in the second budget, at ¥800 billion, would be used for emergency spending in the future, while ¥300 billion would be earmarked for additional financial support for people whose homes were badly damaged or destroyed in the disaster, the Finance Ministry said.
In relation to the nuclear crisis, the government counted ¥275.4 billion in provisional costs, including ¥120 billion for the government’s part of compensation for the problems at Fukushima No. 1, whose operator, Tokyo Electric Power Co., will have to shoulder a bigger part of overall damage.
Second extra budget’s key outlays
• ¥800 billion in reserve for future emergency spending.
• ¥545.5 billion in grants to local governments affected by the disaster.
• ¥300 billion in additional spending on financial support to those who had their homes badly damaged or destroyed.
• ¥120 billion for the government’s part of compensation over the crisis at the Fukushima No. 1 nuclear plant.
• ¥78.2 billion to finance health checks over the next 30 years on people in Fukushima Prefecture in the wake of the nuclear crisis.
The government plans to create a ¥96.2 billion fund to cover expenditures on health issues concerning people in Fukushima Prefecture.
Of that amount, ¥78.2 billion would finance health checks over the next 30 years for people in the prefecture, the ministry said.
The government would also enhance the monitoring of radiation levels throughout the country, spending ¥23.5 billion.
It has separately submitted a bill to the Diet to create a government-backed body that would help Tepco meet huge compensation claims, while under the extra budget the government would invest ¥7 billion for a stake in the utility.
The Ministry of Economy, Trade and Industry plans to ask companies operating nuclear power plants, including Tepco, to provide another ¥7 billion as contributions for the body, ministry officials said.
The government is also making arrangements to set an upper limit of ¥2 trillion for special government bonds to be issued, when it proves necessary, to fund the body, which could borrow another ¥2 trillion from banks and other entities with the government compensating the loans.
Because many individuals and companies have been forced to borrow money since the catastrophe unfolded, in addition to their existing loans, the government is taking steps to address the problem.