The budget for reconstruction

March 11, 2015

News Navigator: What is the budget for reconstruction?

http://mainichi.jp/english/english/perspectives/news/20150311p2a00m0na014000c.html

The Mainichi answers some common questions readers may have about the budget for reconstruction.

Question: Minister for Reconstruction Wataru Takeshita has proposed a review of the budget for reconstruction in areas hit by the 2011 Great East Japan Earthquake and tsunami. What's the mechanism of the recovery budget?

Answer: In the first move of its kind since the end of World War II, a special account for reconstruction was set up apart from the general account, due to the enormous expenditure necessary for restoration from the 2011 quake disaster. Under a basic reconstruction policy laid out by then Prime Minister Naoto Kan's Cabinet in July 2011, a 10-year reconstruction period was spelled out to continue until fiscal 2020.

The first five years during that period was defined as an "intensive recovery period," for which an approximately 19 trillion yen budget was allocated. After the government changed hands, Prime Minister Shinzo Abe boosted the budget to some 25 trillion yen in January 2013, pledging to accelerate restoration efforts. In the fiscal 2015 budget draft, the budget allocation was further hiked to 26.3 trillion yen.

Q: What's the breakdown of the budget funds?

A: The highest proportion comes from the tax increase for reconstruction at 10.5 trillion yen, followed by non-tax revenues and cuts in expenditures at 8.5 trillion yen, proceeds from the sale of Japan Post shares at 4 trillion yen, and a settlement surplus at 3.3 trillion yen. The 1.3 trillion yen extra amount added to the initially set 25 trillion yen under the Abe government is to be funded by the settlement surplus in the general account at 0.7 trillion yen and a surplus in the fiscal investment and loan special account at 0.6 trillion yen.

Q: For what projects is the reconstruction budget used?

A: The recovery budget is spent on government-led reconstruction projects such as roads and breakwaters for disaster restoration, subsidies to local governments for building disaster restoration housing and developing land for relocating residences to upland areas, and special grants to cover expenses for dispatching employees to disaster-hit municipalities, among other destinations.

Out of the approximately 25.1 trillion yen set aside for the reconstruction budget by fiscal 2013, roughly 5 trillion yen remains unused, according to the Board of Audit, raising questions about the way budgets are executed. A review of the reconstruction budget should investigate issues, including budget implementation, from the inside out. (Answers by Akira Matsumoto, Political News Department)