Tokyo - Japan said Friday it would delay ¥5.0 trillion in
spending as the government faces a severe cash crunch that could see it run out
of money within months.
Officials warned there would not be enough money to cover
its expenses as political gridlock ties up passage of a bond-issuance bill
needed to help pay for some 40% of Tokyo's spending in the fiscal year to
Finance Minister Jun Azumi warned on Friday that public
reserves would "mostly dry up at the end of November" if the
opposition-led stalemate continued, with the current parliament due to end on
They are expected to restart in October. "There is a
high possibility that we will have to make further delays in November,"
Azumi told a regular news conference on Friday.
Tokyo has not been forced to halt budgetary spending due to
a funding shortage since the end of World War II, according to the finance
The spending that would be affected includes tax grants to
municipalities, aid for universities and support for government-linked
companies, the ministry said.
The delay also threatened to hamper Japan's fragile economic
recovery, which has largely been driven by massive government reconstruction
spending after last year's quake-tsunami disasters, Azumi said.
Last month, the opposition-controlled upper house slapped
Prime Minister Yoshihiko Noda with a censure motion as it demanded he call snap
The non-binding motion, a symbolic wrist slap signalling the
opposition's refusal to work with Noda's cabinet, has tied up passage of any
new law including the bond bill that was key to covering Tokyo's deficit
Japan has an eye-watering national debt that amounts to more
than twice its gross domestic product - the highest among industrialised
nations, with the costs of a rapidly ageing population heaping pressure on
Legislators passed a bill earlier this year to double
Japan's sales tax to 10% by 2015 in a bid to help deal with rising public
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