Gov't, ruling parties agree on Y1 tril subsidies for public works

Tuesday 09th December, 06:22 AM JST

TOKYO —

The government and the ruling coalition of the Liberal Democratic Party and the New Komeito party said Monday they agreed to create a 1 trillion yen package of new subsides for local governments to be used for public works. Under their basic policy to free up tax revenues, which are earmarked for building roads, for general spending purposes from fiscal 2009, about 80% of the 1 trillion yen is expected to be used for road construction and maintenance.

Under their policy, the existing 700 billion yen in allocations to local governments, which are used to construct and maintain community roads, will be reorganized into the 1 trillion yen package by adding 300 billion yen so that the subsidies can be used to improve transport infrastructure such as railway station plazas.

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8 Comments

proxy at 07:54 AM JST - 9th December

...and the economic loss caused by traffic disruption will be Y1.000001 tril.
some14some at 08:07 AM JST - 9th December

Wonder what effect Y1tri will have on economy when this nation has spent all its wealth on nothing but public works for last 60 years but infrastructure still remains incomplete.
Simon_Foston at 08:36 AM JST - 9th December

Wonder what effect Y1tri will have on economy when this nation has spent all its wealth on nothing but public works for last 60 years but infrastructure still remains incomplete.

The construction companies will be able to stay in business, keep their employees and pay their salaries. The construction workers will then go out and buy up everything in the shops, thus increasing sales and saving the whole economy. Sorted!

As an added bonus they'll keep voting for the LDP, and the construction company bosses will remember their old friends in the Diet who made it all possible when they're next thinking about who to make political donations to. Trebles all round!
thepro at 09:12 AM JST - 9th December

lol, more 'public works' slush funds
HeathenCabin at 10:43 AM JST - 9th December

The government should not have wasted so much money for jobs/companies that need to fail. Given what is happening to the economy, the government will continue to dig a deeper hole with public spending projects, otherwise known as "Useless Projects that never make any profits."
thepro at 12:47 PM JST - 9th December

All it's for is buying votes. Get this LDP out of here.
Simon_Foston at 05:19 PM JST - 9th December

The government should not have wasted so much money for jobs/companies that need to fail.

Quite right. But I imagine they're terrified of the prospect of a voter backlash due to job losses. The jobs themselves might serve no useful purpose whatsoever, but that's one of those painful truths that no one wants to admit to.
dontpanic at 12:54 AM JST - 10th December

As long as the tender process is honest, theres 300 billion yen in new money entering the economy. Probably paid for by borrowing but employees who get to keep their jobs wont care too much about that.