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2010年7月29日 (木)

概算要求基準 予算編成を人気取りに使うな

The Yomiuri Shimbun (Jul. 29, 2010)
Budget compilation isn't popularity contest
概算要求基準 予算編成を人気取りに使うな(7月28日付・読売社説)

The Cabinet has adopted guidelines for fiscal 2011 budgetary requests.

Last year, Prime Minister Yukio Hatoyama's Cabinet decided to drop similar guidelines, which led to the fiscal 2010 budget ballooning to become the biggest ever.

We think the government is right to revive the guidelines for budgetary requests, considering what happened last year. However, the government seems set to charge ahead with the free-spending handout policies the Democratic Party of Japan announced in last year's election manifesto. In stark contrast to planned spending cuts, the government plans to offer income compensation to farmers and partially abolish expressways tolls.

The government also plans to set aside funds to be funneled to growth fields, such as medical and nursing services as well as the environment. It also proposed that determining how to allocate this special budget would be conducted in full view of the public.

The government apparently plans to conduct something along the lines of the budget screening for wasteful spending, which smacked of political grandstanding.


Kan seeking boost?

The plan appears to be an attempt to restore the falling popularity of Prime Minister Naoto Kan. But we doubt whether cool-headed discussions can be carried out in an environment open to the public. The government must not use the budget compilation process as a tool to gain popularity.

The prime minister must sincerely review and retract funding scheduled to be used for the manifesto pledges, and secure revenue sources before the fiscal 2011 budget will be decided at the end of the year.

The outline for the budgetary request guidelines is in line with the fiscal management strategy compiled in June. The government will cap general-account spending, excluding debt-servicing costs, below 71 trillion yen and new government bond issuance below 44 trillion yen, just as in the fiscal 2010 budget.

Based on these figures, the Cabinet approved a natural increase of 1.3 trillion yen in social security costs. An expected rise in these costs from the graying population and declining birthrate will be unavoidable, but the child-rearing allowance should be reviewed from scratch.


Growth fields

The focus of the budget will be the special allocation for growth fields. The DPJ initially proposed to the government that 2 trillion yen be earmarked for the scheme. The two parties eventually settled on the ambiguous expression of "an amount far above 1 trillion yen."

Combined with the natural increase in social security costs, the government will need an additional 3 trillion yen or so. The government said this could be covered by a uniform 10 percent cut in policy-related spending for all ministries and agencies--including spending on education, defense and public works projects.

However, the government likely will struggle to secure the revenue it needs, given that ministries and agencies have bristled at the across-the-board 10 percent cut plan, and manifesto-related budgets are to be handled separately.

The government used more than 10 trillion yen in nontax revenue, including surplus funds in special accounts, dubbed "buried treasure," for the fiscal 2010 budget. However, the buried treasure chest is almost empty. If nontax revenue drastically declines, the government may be forced to issue more government bonds than it did in the current fiscal year, rather than capping the issuance at 44 trillion yen as planned.

But this would make a mockery of Japan's international pledge to put state finances back on a sound footing. Securing revenue sources will be essential to reducing the budget deficit.

The fiscal 2011 budget compilation process is spelling out in black and white that the government must urgently tackle tax system reform--including an increase in the consumption tax rate.

(From The Yomiuri Shimbun, July 28, 2010)
(2010年7月28日01時18分  読売新聞)


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