The government and the ruling Liberal Democratic Party agreed Friday to a watered-down plan on road-related tax revenues that will move only the money not allocated to road construction projects into the general expenditures category.
The plan says the government will only put surplus road-tax revenue into general expenditures. Opponents of the plan got the government to promise in the plan that it will craft a medium-term blueprint for national road construction.
"Deciding on the reform is just a start because much will depend on how much the government can limit construction spending in the mid-term," said Koichi Haji, chief economist at NLI Research Institute. "It's hard to determine the feasibility of the plan right now."