Japan’s lower house passes controversial extra budget featuring travel campaign

Japan had to shelve the travel campaign in late December, drawing criticism from opposition parties that the extra budget has become irrelevant. PHOTO: REUTERS

TOKYO (REUTERS) - Japan's powerful Lower House of Parliament approved this fiscal year's third extra budget on Tuesday (Jan 26), despite criticism it focuses too much on a government tourism campaign rather than address imminent medical needs as Covid-19 infections spike.

Prime Minister Yoshihide Suga rebuffed calls from opposition parties to rejig the 19-trillion-yen (S$243 billion) extra budget, which was compiled before the government declared a state of emergency in January to contain a resurgence in the virus.

Based on the assumption back then that infection numbers will subside, 60 per cent of the spending was earmarked for promoting a 'green' and digitalised economy as well as funding to extend a government campaign to promote domestic travel until end-June.

A spike in infections, however, forced Mr Suga to shelve the travel campaign late December, drawing criticism from opposition parties that the extra budget has become irrelevant.

Another 16 per cent of the third extra budget was set aside for infrastructure spending, leaving just 23 per cent for preparation of vaccine roll-outs and aid to medical institutions under strain from rising numbers of patients.

"We began the travel campaign last year because regional economies were struggling to stay on their own feet," Mr Suga told the Lower House budget committee, defending the move as helping create 460,000 jobs.

"We'd like to decide what to do from now on while monitoring the situation regarding coronavirus infections," he said.

Some opposition parties called for taking 6 trillion yen out from the extra budget, and redirecting the money to more imminent medical needs - a request Mr Suga's ruling coalition quickly rejected.

Approval of the budget by the Lower House will secure its enactment as the Upper House does not have the legal power to override the budget Bill that has passed in the more powerful lower chamber.

Any revision to the budget Bill would have been a setback for Mr Suga, who is already facing slumping poll ratings on disapproval over his handling of the pandemic.

The huge cost of dealing with the health crisis adds to Japan's already huge public debt which, at twice the size of its US$5 trillion (S$6.63 trillion) economy, is the largest among major economies.

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