Japan draws up $50 billion budget for post-tsunami reconstruction efforts

<p>TOKYO – Japan drew up an extra budget worth over $50 billion on Friday to help finance post-tsunami reconstruction efforts.</p> <p>The Cabinet of Prime Minister Naoto Kan approved the budget totalling 4.02 trillion yen ($50 billion), the finance ministry said. Japan’s parliament is expected to pass the budget next week.</p> <p>”This is the first step toward rebuilding Japan after the major disasters,” Finance Minister Yoshihiko Noda told reporters.</p> <p>The government will allocate around 1.2 trillion yen to fix roads and ports damaged by the March 11 earthquake and tsunami.</p> <p>The twin disasters decimated much of industrial northeastern Japan and killed more than 25,000 people.</p> <p>Under the budget, the government will spend over 362 billion yen to build temporary homes for disaster victims, with another 352 billion yen for clearing rubble.</p> <p>The government has said the cost of the earthquake and tsunami could reach $309 billion, making it the world’s most expensive natural disaster on record.</p> <p>The Organization for Economic Cooperation and Development on Thursday said Japan should as much as quadruple its sales tax to deal with a crushing deficit that’s bound to grow as it spends on reconstruction.</p> <p>Economists for the association of wealthy, industrialized nations said in a report that Japan’s public debt of more than twice its gross domestic product leaves it little choice but to gradually raise its sales tax, now 5 per cent, to as high as 20 per cent.</p>