The Straits Times
Published on Nov 15, 2012

Japan's lower house passes crucial deficit bill


TOKYO (AFP) - Japan's lower house on Thursday passed a crucial deficit-financing bond bill that will allow Tokyo to pay for a huge chunk of this year's public spending, and avoid its own "fiscal cliff".

The bill, which was expected to win approval in the opposition-controlled upper house of parliament on Friday, was a key condition for Prime Minister Yoshihiko Noda agreeing to call the elections demanded by the opposition.

Mr Noda had warned that large parts of Japanese public life would grind to a halt unless the bill was approved, allowing Tokyo to issue new bonds that would cover about 40 per cent of its budget spending in the year to March.

The opposition had refused to green light the bill until Mr Noda gave a specific timeline for calling elections, which a senior ruling party lawmaker confirmed on Wednesday would be held on Dec 16.