Proposal for Establishment of Reconstruction Fund and Reconstruction Solidarity Tax to Finance Rehabilitation after Great Earthquake of Unprecedented Scale
March 18, 2011
Japan was hard-hit by the Tohoku Pacific Offshore Earthquake. With leadership from the central government, we have to overcome this hardship, making our utmost efforts to rebuild afflicted areas.
Thus, DIR proposes the establishment of the Eastern Japan Great Earthquake Reconstruction Fund (provisional name) to facilitate loans and investment for rehabilitation programs designed for local governments, corporations, and households damaged by the earthquake.
Major points:
- Eastern Japan Great Earthquake Reconstruction Fund (provisional name) would be managed by government, with the purpose limited to financing disaster relief work.
- Money for fund to come from reconstruction fund bonds (government-backed) targeting institutional investors and individuals.
- Local governments impacted by disaster must use investment and loans to efficiently and systematically carry out reconstruction work.
- Expect sources of repayment to come from post-reconstruction revenue and temporary reconstruction solidarity tax (provisional name). Local governments must maintain fiscal discipline throughout the process.