By Yuzo Saeki
TOKYO, Jan 15 (Reuters) - Japan has pushed back its estimate of a balanced budget by seven years, hit by the onslaught of the global financial crisis which has spurred a series of fiscal stimulus programmes for an economy in recession.
But the provisional estimate -- which says a surplus cannot be expected before the year to March 2019 and was designed to show the government was still committed to tighter fiscal policy long-term -- has already created an uproar.
Part of the estimate assumes a long-debated hike in the consumption tax to 10 percent from the current 5 percent between 2011-2015 but that has displeased many ruling lawmakers, who fear losing favour with voters in a looming election.
They have asked the Cabinet Office to provide another estimate that does not include a hike in the tax.
Under the current estimate, the budget for central and local governments, excluding debt issuance and servicing, is expected to post a surplus of 800 billion yen ($9 billion) in the year to March 2019. That would be equivalent to 0.1 percent of nominal gross domestic product.
It projects a deficit of 17.2 trillion yen, or 3.4 percent of GDP for the year to March 2009, which is expected to balloon to a deficit of 21.6 trillion yen or 4.2 percent of GDP in the next fiscal year.
The estimate also contrasts with more pessimistic forecasts from private-sector economists, assuming Japan's real economic growth will recover to 1.5 percent in the year to March 2011 from flat growth in the next business year.
Tokyo has joined other nations across the world in boosting spending to stem the fallout from the financial crisis, unveiling stimulus programmes totalling 12 trillion yen, or more than 2 percent of Japan's gross domestic product.
The economic downturn has also slashed revenues from corporate taxes, making fiscal goals even more difficult to meet. Tax revenues for this fiscal year are expected to fall 7.1 trillion yen from initial estimates.
Under economic policy guidelines drawn up in 2006, Japan pledged to cut spending and to aim to balance the budget, excluding debt issuance and servicing, by March 2012.
Japan's public debt, which is about 150 percent of GDP, snowballed as the government dished out a series of stimulus packages after the bursting in the early 1990s of a bubble economy of soaring land and stock prices. (Reporting by Yuzo Saeki; Editing by Edwina Gibbs)