Japanese Prime Minister Fumio Kishida’s cabinet has decided to increase the emergency budget reserves for fiscal 2024/25 in response to the devastating Noto peninsula earthquakes, government officials revealed on Tuesday.
The magnitude 7.6 earthquake struck the Noto peninsula on New Year’s Day, resulting in over 220 deaths and a number of individuals still missing. This event is the deadliest earthquake in Japan since the 2016 quake in Kumamoto in the southern Kyushu region.
In order to provide aid, authorities will issue additional Japanese government bonds (JGBs) to double the amount of emergency reserves to 1 trillion yen ($6.86 billion) from the initially planned 500 billion yen.
This decision will lead to a slight increase in the annual budget’s debt-dependency ratio to 31.5% from the previous 31.2%, further adding to Japan’s already substantial debt burden.
“With this measure, we thoroughly prepare for all eventualities,” a finance ministry official told reporters.
This move to revise an annual draft budget that has already been submitted to parliament for debate and approval is a rare occurrence and comes ahead of parliament’s regular sessions later this month.
Last week, Finance Minister Shunichi Suzuki emphasized that the budget reserves would provide the government with flexibility to respond to any funding needs without requiring advance approval from parliament.
For the current fiscal year, the government has allocated 4.7 billion yen for evacuation centers.
In response to the disaster, Kishida has instructed his administration to put together a disaster relief package worth over 100 billion yen by the end of the month to aid in the construction of makeshift shelters, roads, and other infrastructure, as well as to assist people in making a living.
Out of the total budget spending plan for the next fiscal year, 112 trillion yen, 500 billion yen is designated for general budget reserves.
Budget reserves are commonly seen as a useful fund for the government as they can be utilized at its discretion without the need for parliamentary approval.
($1 = 145.7900 yen)
(Reporting by Tetsushi Kajimoto; Editing by Christopher Cushing)
