Reuters Tokyo
A draft of Japan’s post-quake reconstruction plan expected the recovery effort to cost up to $152 billion (R1 trillion) over five years, but did not address tax increases seen as necessary to pay for the project, the Asahi daily said at the weekend.
It also called for development of solar and wind power, as long-running attempts to bring the Fukushima nuclear power plant under control have generated public disillusion with nuclear energy and prompted authorities to consider alternatives.
The government plans to compile the reconstruction scheme by the end of the month as the backbone of a third extra budget to be compiled in a few months.
“(The draft) estimates recovery costs for the next five years at ¥10 trillion (R874bn) to ¥12 trillion, and calls for installation of some of Japan’s largest solar power and wind power facilities in the disaster-hit area,” Asahi said. “Specifics of tax hikes for financing the reconstruction are not in the scheme, delaying the debate to August and later.”
The 9-magnitude quake and tsunami devastated a large swath of northern Japan, and recovery expenditure will likely drive Japan, already saddled with public debt twice the size of its $5 trillion economy, deeper into deficit. The crippled Fukushima plant is still leaking radiation.
A government advisory panel on reconstruction said last month that a temporary increase in “basic taxes” should be discussed to help pay for Japan’s biggest rebuilding project since the period following World War II.
“Basic taxes” refer to such items as income, sales and corporate taxes.
The quake and tsunami knocked out the cooling functions of Tokyo Electric Power’s Fukushima plant, triggering the world’s worst nuclear crisis in 25 year. The company says it is sticking to a plan to bring the plant under control by January, although some critics say that is excessively optimistic.
At the weekend, Kansai Electric Power, which serves western Japan, said it planned to shut down one of its reactors due to technical glitches, further compounding the tight power supply and stifling the nation’s manufacturing activity.