JAPAN’S parliament yesterday passed a €33 billion emergency budget for disaster relief after the March 11 earthquake and tsunami, a down-payment on what is set to be the country’s biggest public works effort in six decades.
The total cost of damage caused by the disaster is estimated at €200bn and the emergency budget will be followed by more spending packages.
Opposition parties have backed the first round of spending to finance work such as clearing rubble in the disaster-stricken northeast and building temporary houses.
But reaching agreement on subsequent packages is likely to be much tougher as funding is expected to involve a mix of tax hikes as well as borrowing in the bond market, a strain for Japan which is already saddled with public debt twice the size of its €3.4 trillion economy.
“Our basic stance is to come up with revenue sources while broadly reviewing both revenue and spending plans,” Finance Minister Yoshihiko Noda told reporters.
The bulk of the €33bn spending will be financed through cuts to existing programmes.
The magnitude 9.0 earthquake and tsunami left around 26,000 dead or missing, and destroyed thousands of homes.
It also crippled a nuclear power plant in Fukushima, 240km north of Tokyo.