budget

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Tepco refusing to pay fallout-hit municipalities for most decontamination work, japan times, 3/30/2015

Tokyo Electric Power Co. has only covered 2 percent of the ¥76.1 billion that municipalities have spent on decontamination work since the Fukushima nuclear crisis began in 2011, according to Environment Ministry officials.

Tepco, operator of the Fukushima No. 1 power plant, has effectively refused to cover the costs of removing tainted soil and other debris gathered by the fallout-hit governments, saying it is confirming whether such payments are required by law.

The central government has paid for the cleanup work on Tepco’s behalf, but if the utility continues to balk, more taxpayer money will be needed to cover the interest payments.

Tepco has so far basically paid for decontamination work conducted directly by the central government in areas close to the nuclear plant, but it has treated decontamination work carried out by local governments in other areas in a different manner.

Under the current scheme, municipal governments are authorized to conduct decontamination in designated areas. The central government pays them first and has Tepco reimburse it for the expenses later.

A law enacted in August 2011 stipulates that Tepco bears the responsibility of paying for the decontamination work. The central government had earmarked ¥1.4 trillion for this effort, including around ¥630 billion for work done by municipal governments, by the end of fiscal 2014.

The Environment Ministry has requested that Tepco pay back ¥76.1 billion by the end of February to cover work for which costs have been finalized. Tepco has only paid ¥1.5 billion.

“It takes time for us to confirm if they were decontamination operations for which we are obliged to pay the costs,” a Tepco official said.

In response, an Environment Ministry official said Sunday that “all of our requests to Tokyo Electric Power have been made based on the law and we will continue to urge the company to pay back all the money.”

Tepco posted its first pretax profit in three years in the business year ended in March 2014 after plunging into financial difficulties following the triple core meltdowns in March 2011.

The utility is projecting a group pretax profit of ¥227 billion for the business year ending Tuesday.

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Only 40% of gov’t subsidies for Tohoku disaster projects spent, mainichi, 3/26/2015

TOKYO (Kyodo) — Only 40.5 percent of government subsidies granted to reconstruction-related projects by municipalities and other entities in Japan between fiscal 2011 and 2013 was used as planned, a review by the Board of Audit of Japan showed Monday.

A total of 3.4 trillion yen ($28.38 billion) was extended to 102 projects during the period for a wide range of areas such as housing, medical services, nursing care and welfare. But only 1.3 trillion yen was spent as of the end of fiscal 2013, as some projects were not carried out as initially planned, or may have been overfunded in the first place.

The Board of Audit of Japan said the finding is not necessarily problematic, given that reconstruction projects need multiple years to be completed. But the body, which checks state expenditures, urged the central government to “examine whether the scale of such projects is appropriate.”

Japan marks the fourth anniversary on March 11 of the 2011 earthquake and tsunami that wreaked havoc on the Tohoku region in the country’s northeast, but reconstruction is far from complete.

Six projects saw their granted subsidies unused, including one to extend low-interest loans to disaster victims to build and repair houses, partly because it took time to reorganize town lots and prepare them on higher ground.

In the three hardest hit prefectures of Iwate, Miyagi and Fukushima alone, 50.9 percent of 1.7 trillion yen in state subsidies granted to 62 projects was used.

The review also found a combined 136 billion yen allocated for 32 disaster-related projects had been returned to the state by the end of March 2014.

Roughly 90 percent of the amount, or 123 billion yen, was given back as the government tightened control over the use of subsidies for reconstruction amid revelations that some subsidies had been diverted to other purposes.

Japan allocated 25.1 trillion yen in reconstruction-related budget from fiscal 2011 to 2013 including the subsidies granted, with around 20.1 trillion yen, or 80.1 percent, spent, according to the board. The rate compares with 77.2 percent in the previous survey that covered fiscal 2011 and 2012.

Around 3 trillion yen was left unspent on such projects as rebuilding of public and medical facilities and removal of waste produced after the Fukushima nuclear crisis, as projects were delayed due to poor coordination, according to the report.

Only 40% of gov’t subsidies for Tohoku disaster projects spent, mainichi, 3/3/2015

TOKYO (Kyodo) — Only 40.5 percent of government subsidies granted to reconstruction-related projects by municipalities and other entities in Japan between fiscal 2011 and 2013 was used as planned, a review by the Board of Audit of Japan showed Monday.

A total of 3.4 trillion yen ($28.38 billion) was extended to 102 projects during the period for a wide range of areas such as housing, medical services, nursing care and welfare. But only 1.3 trillion yen was spent as of the end of fiscal 2013, as some projects were not carried out as initially planned, or may have been overfunded in the first place.

The Board of Audit of Japan said the finding is not necessarily problematic, given that reconstruction projects need multiple years to be completed. But the body, which checks state expenditures, urged the central government to “examine whether the scale of such projects is appropriate.”

Japan marks the fourth anniversary on March 11 of the 2011 earthquake and tsunami that wreaked havoc on the Tohoku region in the country’s northeast, but reconstruction is far from complete.

Six projects saw their granted subsidies unused, including one to extend low-interest loans to disaster victims to build and repair houses, partly because it took time to reorganize town lots and prepare them on higher ground.

In the three hardest hit prefectures of Iwate, Miyagi and Fukushima alone, 50.9 percent of 1.7 trillion yen in state subsidies granted to 62 projects was used.

The review also found a combined 136 billion yen allocated for 32 disaster-related projects had been returned to the state by the end of March 2014.

Roughly 90 percent of the amount, or 123 billion yen, was given back as the government tightened control over the use of subsidies for reconstruction amid revelations that some subsidies had been diverted to other purposes.

Japan allocated 25.1 trillion yen in reconstruction-related budget from fiscal 2011 to 2013 including the subsidies granted, with around 20.1 trillion yen, or 80.1 percent, spent, according to the board. The rate compares with 77.2 percent in the previous survey that covered fiscal 2011 and 2012.

Around 3 trillion yen was left unspent on such projects as rebuilding of public and medical facilities and removal of waste produced after the Fukushima nuclear crisis, as projects were delayed due to poor coordination, according to the report.

Reconstruction of quake-hit areas could cost gov’t 23 tril. yen, mainichi shinbun, 7/22/11

TOKYO (Kyodo) — The Japanese government will need to spend at least 23 trillion yen ($291 billion) on reconstruction projects over the next decade following the March 11 earthquake and tsunami, and is planning to expend around 80 percent of the funds during the first half of the period, officials said Thursday.

In order to secure necessary funds, the government is considering spending cuts of around 500 billion yen every fiscal year to be achieved by revising key policies, selling some state-owned assets such as housing for government officials and newly issuing “reconstruction bonds” that would be serviced with the proceeds from tax hikes worth 10 trillion yen.

The plans are expected to be included in basic guidelines that the government is aiming to complete within this month. Prime Minister Naoto Kan and members of his Cabinet met and outlined the guidelines but fell short of finalizing the figures.

Tatsuo Hirano, minister in charge of reconstruction, told reporters after the meeting that he wants to get the numbers finalized through talks between relevant ministers before setting the guidelines.

In the wake of the 1995 Great Hanshin Earthquake, the government spent a total of 11.6 trillion yen on reconstruction projects in the following decade, with around 80 percent of the funds used up in the first five years.

Earlier in the day, the ministers agreed on the scope and length of reconstruction projects.

The spending over the next five years, totaling around 19 trillion yen, would cover projects such as demarcating land affected by the March 11 disaster, relocating people who used to live in devastated areas as well as infrastructure development related to the farming and fisheries industries.

Workers construct temporary housing for people whose homes were destroyed by the March 11 earthquake and tsunami in the grounds of a school acting as a shelter in Rikuzentakata, Iwate Prefecture, Japan, Sunday, March 20, 2011. (AP Photo/Matt Dunham)
The government has already drawn up two extra budgets for fiscal 2011, totaling around 6 trillion yen, and the focus is shifting to how it will secure another 13 trillion yen at a time when the country’s public finances are the worst among major developed economies.

Unlike the two supplementary budgets, the government is expected to rely on debt in the form of reconstruction bonds to create a third budget. But amid the need for fiscal discipline, it is aiming to secure funds for servicing the bonds through such measures as temporary tax hikes.

Details have yet to be worked out on possible tax increases, but it is widely expected that income and corporate taxes will be raised.

(Mainichi Japan) July 22, 2011

UPDATE 1-Japan reconstruction min:BOJ shouldn’t underwrite bonds, reuters, 7/14/11

Thu Jul 14, 2011 3:32am EDT

Hirano: reconstruction bonds to be repaid by tax hikes

March disaster adds to fiscal strain for indebted Japan (Adds quotes, background)

(Reuters) – Japan’s new reconstruction minister Tatsuo Hirano said on Thursday that the Bank of Japan should not underwrite reconstruction bonds to fund the rebuilding of areas damaged by the earthquake and tsunami in March.

“Underwriting of government bonds is something the central bank should not do,” Hirano told reporters.

Some lawmakers have urged the BOJ to directly underwrite debt so the government can fund spending for reconstruction from the disaster without selling more bonds in the market.

But the central bank strongly opposes underwriting bonds, or printing money to finance government debt, warning that doing so would hurt market trust in Japan’s finances and could trigger a spike in long-term interest rates.

Hirano, who recently took over after his predecessor abruptly resigned over comments that offended victims of the March disaster, also said he believes reconstruction bonds will mainly be repaid via tax increases.

Japan, which is saddled with public debt twice the size of its $5 trillion economy, has estimated the direct material damage from the March 11 disaster will reach 16.9 trillion yen ($214 billion).

Ratings agency Standard & Poor’s in April lowered Japan’s sovereign rating outlook to negative from stable, factoring in the fiscal strain the natural disasters would impose on the government.

The reconstruction ministry was formed following the March natural disasters that left at least 21,000 dead and missing. ($1 = 79.015 Japanese Yen)

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