A government-appointed panel compiling the big picture for rebuilding from the Great East Japan Earthquake will call for a temporary increase in core taxes to pay for reconstruction as well as the distribution of those revenues to local governments where the money is most needed.
A government-appointed panel compiling the big picture for rebuilding from the Great East Japan Earthquake will call for a temporary increase in core taxes to pay for reconstruction as well as the distribution of those revenues to local governments where the money is most needed.
The panel will also recommend that a separate body be established to discuss what measures are needed for rebuilding in Fukushima Prefecture in the wake of the accident at the Fukushima No. 1 nuclear power plant that followed the quake and tsunami on March 11.
The latest proposal adds more specifics to the outline draft released on June 11. The proposal will be the first package related to the rebuilding process and is expected to be formally approved on June 25 and submitted to Prime Minister Naoto Kan.
Regarding the revenues to fund the rebuilding process, the proposal states, "A multi-faceted discussion should be conducted as soon as possible centered on temporary increase measures for core taxes and specific measures should be implemented."
It also clearly says that the revenues raised from the temporary hikes in tax rates should be used to repay any government bonds that are issued.
The proposal adds, "When issuing 'rebuilding bonds' as a temporary stopgap measure to pay for pressing demands, (temporary tax hikes) will be particularly important from the perspective of maintaining market confidence in Japanese government bonds."
Because some panel members are strongly opposed to any tax increase measure, the proposal does not include any specific taxes that would be subject to those increases. However, because the Kan administration has taken a cautious stance toward increasing the consumption tax rate to obtain revenues for the rebuilding process, the taxes that will likely have temporary increases are the individual and corporate income taxes.
The proposal also emphasizes the need to take into consideration the situation among local governments.
It states, "If local governments undertake full-fledged rebuilding projects, those governments will face additional burdens. Revenues for rebuilding needed by local governments should be secured through the temporary tax increase measures."
The proposal recommended an increase in tax grants distributed to local governments, establishing grants that local governments can use with more freedom and consideration for the establishment of funds that local governments can use flexibly for the rebuilding process.
The full proposal has a much larger section on dealing with the Fukushima nuclear accident than the initial outline proposal.
It calls for the establishment of another panel that would devote itself to the rebuilding process after the nuclear accident. It also calls for a continuous monitoring of radioactive materials as well as a long-term check of the health of disaster victims.
The proposal also says "there is a need to accelerate the introduction" of natural energy sources.
It states that the Pacific coast of the Tohoku region has a similar amount of sunshine as the Kanto region, making it advantageous for solar energy. It also points to other natural resources in the region, such as geothermal sources, forests and water, as being potential sources of energy. The proposal also states that there are many locations in the Tohoku region suited for wind power generation.
Regarding the situation in Fukushima, the proposal says, "In order to create the jobs that have been lost due to the nuclear accident, the promotion of industries related to sustainable energy sources will be important. It should become a pioneering region for sustainable energy."