JAPAN RULING PARTY SEEKS BIG SUPPLEMENT BUDGET
The ruling Liberal Democratic Party has
drawn up the guidelines of an economic package including a
supplementary budget of more than 5,000 billion yen, a senior
party official said.
    The official, the LDP Policy Affairs Research Council's
Chairman Masayoshi Ito, told a press conference the proposed
supplementary budget will probably be compiled no earlier than
August but before November.
    It also urges the government to concentrate in the first
half of the current fiscal year which began on April 1 a record
proportion of the year's public works spending.
    The guidelines will be explained to the U.S. this week when
Finance Minister Kiichi Miyazawa visits Washington for the
meetings with the IMF and G-7 ministers, Ito added.
    The LDP suggested the government review the ceiling on
budgetary requests for investment in public works projects
presented by individual ministries, Ito said.
    But the LDP official said the government should not abandon
its fiscal reform target of ending the issue of
deficit-covering bonds by fiscal 1990.
    These measures should be treated as an emergency, partly
because of the urgent need for Japan to redress its external
trade imbalance with the U.S., He said.
    The guideline will be the basis for a more detailed
reflationary plan to be worked out by the LDP before Prime
Minister Yasuhiro Nakasone leaves for Washington on April 29
for talks with President Reagan, Ito said.
    The full government-endorsed economic package is expected
to be announced in late May.
    The LDP expects public works spending in the first 1987/88
half to account for more than 80 pct of what was originally
incorporated in the fiscal 1987 budget, Ito said. The previous
record for the rate was 77.5 pct in 1986/87.
    Ito said revenue sources for the additional pump-priming
measures should include the issue of construction bonds and the
use of part of the proceeds from sales of the privatized Nippon
Telegraph and Telephone Corp stocks.
    An LDP statement said the government should use the
additional budget mainly to encourage housing construction and
to revitalize regional economies hit hard by the yen's rise.
 Reuter
