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Over $30 bil. of budget for public works in Japan unspent in FY 2020, 2021

The building housing the Ministry of Land, Infrastructure, Transport and Tourism is pictured in Tokyo's Chiyoda Ward. (Mainichi/Kazuo Motohashi)

TOKYO (Kyodo) -- Japan rolled over 4 trillion yen ($30 billion) year to year in unspent funds in the budget for public works projects in both fiscal 2020 and 2021, government data showed Tuesday, at a time when the country's debt is ballooning.

    The surplus is a result of spending not keeping up with the huge supplementary budget allocated for national resilience measures aimed at creating disaster-ready areas.

    The rollover amounts for the last two fiscal years through March 2022 have exceeded that of fiscal 2012, when a large budget was earmarked for reconstruction in the wake of the devastating 2011 earthquake and ensuing tsunami in northeastern Japan.

    As public works projects can help stimulate the economy, the government and ruling coalition may also have been hoping to win voter support by expanding the budget.

    The Ministry of Land, Infrastructure, Transport and Tourism has said that since decisions on supplementary budgets are made in the latter half of the fiscal year, "some projects will be carried over to the next fiscal year."

    According to government accounts and the Finance Ministry, public works-related expenses rolled over to the following year totaled 4.70 trillion yen in fiscal 2020 and 4.04 trillion yen in fiscal 2021, representing 35.4 percent and 31.6 percent, respectively, of the unspent funds.

    A labor shortage in the construction industry is believed to have led some projects to stall, contributing to the large rollover amount.

    A survey by an independent administrative agency in Japan showed that the excess-shortage index, which is calculated by subtracting the deficit of construction workers from the surplus, exceeded minus 30 in the April to June quarter of 2022.

    In fiscal 2012, the year following the earthquake and tsunami, 3.77 trillion yen in the public works budget was rolled over.

    While the amount decreased to under 2 trillion yen from fiscal 2013 through 2015, it has been on an upward trend since the Kumamoto earthquakes and torrential rains in 2016 prompted the central government to push measures for national resilience.

    In fiscal 2021, the government initiated "accelerated measures" to strengthen the country's resilience over a five-year period by targeting improvements in 123 items including fixing decrepit roads and public facilities.

    But with national debt swelling, and much infrastructure already in place, there are calls for the government to be more selective in the projects it undertakes.

    Takero Doi, a professor in public finance at Keio University, called for promoting disaster countermeasures that can be effective while keeping expenditure low, such as the use of existing infrastructure.

    "Supplementary budgets should only be added when the initial budget and rollover funds have been used up," he said.

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