Japan's lower house approves 2nd recovery budget

Japan's powerful lower house Wednesday approved a $25 billion extra budget to pay for relief and rebuilding after the March 11 quake-tsunami, amid mounting pressure on Prime Minister Naoto Kan to resign. The two-trillion-yen second extra budget for fiscal 2011 will now go to the upper house, which is expected to enact it Friday, with support from both the ruling Democratic Party of Japan and the main opposition Liberal Democratic Party and its partner New Komeito. The budget sets aside 800 billion yen in reserve for reconstruction and 275 billion yen for the nuclear crisis at Fukushima Daiichi nuclear plant, including compensation for victims and health checks for local residents. The government will use surplus funds from last year to pay for the budget to avoid having to issue new bonds, as Japan already faces the industrialised world's largest public debt at around 200 percent of GDP. Kan's government plans a third extra budget later this year, with analysts estimating it to be worth 10 trillion yen. The government has estimated costs resulting from damage from the March 11 disasters at 16.9 trillion yen, but this does not include expenses associated with the crisis at the crippled Fukushima plant. Kan's administration has faced heavy criticism for not acting swiftly enough to help victims of the earthquake and tsunami that devastated Japan's northern Pacific coasts, with his approval ratings limping below 20 percent. The premier survived a no-confidence vote in June by promising to resign at some point in the future, and has since indicated that he will step down in late August. His government is also seen to be slow in dealing with the nuclear crisis that has forced tens of thousands to evacuate their home and caused widening food contamination.