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2008年7月29日 (火)


(Jul. 29, 2008) The Yomiuri Shimbun

Fiscal '09 budget rules fail to address pensions

来年度予算 「基礎年金」の答えはいつ出す(7月29日付・読売社説)

Although the government has decided on the details of budgetary request guidelines for fiscal 2009, it is inevitable that compiling the budget for the next fiscal year will be an unusually difficult task. Toward the end of the year, Prime Minister Yasuo Fukuda's leadership will be called into question anew.



The ceilings for budgetary requests, a set of criteria for determining the draft budget for the next fiscal year, is scheduled to be approved by the Cabinet on Tuesday.


The key element of the fiscal 2009 budgetary requests is the creation of the "important issues promotion category" that amounts to 330 billion yen.


As an exception in the guidelines that set limits for budgetary requests by government ministries, a certain amount of budget increase will be approved for items related to certain issues under the system.


Those issues will include easing the worsening doctor shortage, addressing the declining birthrate and aging society, measures to tackle the global warming issues that were the major focus at the Group of Eight summit of major nations in Toyakocho, Hokkaido; and ways to reinforce dynamic growth.



Further cuts required


However, the current severe fiscal situation requires further cuts in other areas if increases are to be approved for items addressing these issues.


For that reason, the government has decided to add 2 percentage points to the previously decided cuts in such areas as public works spending, which was set to be chopped by 3 percent from a year before, and defense related expenditure and spending on national university operations, both of which were set for a 1 percent reduction. In the case of public works spending, this means the budget will be cut by 5 percent from the initial 2008 budget.


In addition, the plan to reduce the natural increase in social security costs by 220 billion yen will be maintained as in the past.


Although it is a desperate action to make the budget compilation work properly while still giving the government some leeway to act on important issues, we doubt whether the 330 billion yen is enough to address such vital concerns. There are even some who say the fund should be expanded drastically.



Other issues ignored


The problem lies in handling pending issues that were shelved in the guidelines. Among them, the most difficult one is how to handle the increase in the government's burden resulting from raising the share of the basic pension payment it shoulders from the current level of little more than one-third to 50 percent. Under normal circumstances, the funds necessary for the plan, 2.3 trillion yen, would have to be incorporated in the social security budget before deciding on the cap for the item.



However, it now seems quite likely that the government will not raise the the consumption tax rate, a measure widely expected to provide the revenue source for this item, due to worries about the economic outlook and the likelihood of a House of Representatives election.


Some measures have emerged as alternatives to a consumption tax hike. They include using the surplus in the government's special accounts, often called the "warlord's buried treasure," or delaying the increase in the government's burden for about six months from the scheduled start at the beginning of fiscal 2009 in April.


In any case, Fukuda has to come up with an answer to the question by the end of the year.


Also, no concrete policy was indicated in the guidelines for directing road-related special revenues into the government's general revenue stream.


Cutting all public works projects, including road-related budget items, by only 5 percent is wholly insufficient.


If he cannot take a machete to road-related budget items, Fukuda will be criticized for breaking his promises.



(From The Yomiuri Shimbun, July 29, 2008)

20087290224  読売新聞)


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