« クリスマスプレゼント^^ | トップページ | ラオス語辞書 »

2010年12月26日 (日)

来年度予算案 辻褄合わせはもう限界だ

The Yomiuri Shimbun (Dec. 26, 2010)
Fiscal 2011 budget fails to address key issues
来年度予算案 辻褄合わせはもう限界だ(12月25日付・読売社説)

The Cabinet approved a record 92.41 trillion yen fiscal 2011 budget at its meeting on Friday.

The Finance Ministry probably would like to engage in a bit of old-style wordplay to read the total figure as "kuni yoi," meaning "country in good condition," as the digit 9 can be read as "ku," 2 as "ni," 4 as "yo" and 1 as "i."

However, if one looks at the severe reality of the budget, which depends on debt, such an optimistic assessment would be unwarranted.

This is the second budget compilation since the Democratic Party of Japan-led administration was established last year. However, the administration of Prime Minister Naoto Kan does not have any effective measures to cope with the revenue shortfall. Instead, it only shows its determination to continue its unreasonable handout policies.

In such a situation, it is impossible to escape from the nation's chronic state of deficits. Looking at this budget, this is certainly the last time the DPJ-led administration will be able to make ends meet by unreasonably using bonds to balance revenue and expenditures. Many citizens must feel anxious now.

44 tril. yen govt bond issue set

The outstanding feature of the fiscal 2001 budget is 28.7 trillion yen in social security-related costs, exceeding half of general expenditures. Debt-servicing costs came to 21.5 trillion yen.

On the revenue side, tax income will be 40.9 trillion yen, up more than 3 trillion yen from the initial fiscal 2010 budget. It regained the 40-trillion yen mark for the first time in two years.

However, nontax revenue comes to only 7.2 trillion yen, even if the so-called buried treasure of reserve funds in special accounts is frantically scooped up.

As a result, the revenue shortfall is covered by issuance of government bonds worth a hefty 44.3 trillion yen, almost identical to the amount in the 2010 budget, which was the largest-ever issuance in an initial budget.

It will be the second year in a row that government bond issuance exceeds tax revenue. For the latest budget, the government depends on bonds for 48 percent of its revenue. What on earth does the government think about this abnormal situation?

"We met the target of capping bond issuance at [about] 44 trillion yen," Finance Minister Yoshihiko Noda emphasized.

Indeed, the target is stipulated in the fiscal management strategy the government compiled in June.

However, it is utter nonsense to make the largest-ever issuance the upper limit. More reasonably, the government should aim at reducing the amount.

The fiscal management strategy also aims at achieving a surplus in the primary balance in state and local finances by fiscal 2020.

If this is the goal of fiscal rehabilitation, the fiscal 2011 budget should have been the first step toward that end, but the government stumbled at this initial step.

Consumption tax issue evaded

This was arguably the result of the Kan administration's procrastination in raising the consumption tax rate. In inaugurating his administration in June, Kan emphasized the need to raise the consumption tax rate. And in this summer's House of Councillors election, he even touched upon the possibility of raising the current rate of 5 percent to 10 percent.

It was probably because he realized the need for fiscal rehabilitation as he attended international conferences as the finance minister and studied fiscal matters until immediately before assuming the prime minister's post. As the leader of the nation, his raising the issue of the need to increase the consumption tax is proper.

However, he was criticized by opposition parties when he abruptly proposed a discussion of the consumption tax issue. Even within the DPJ, many opposed the move because it would put the party at a disadvantage in the election. Kan then cooled his rhetoric on the matter considerably. After the party's huge defeat in the upper house election, he rarely touched upon the issue. We quite regret his change of attitude.

The factor that made the confusion in budget compilation complete was an obsession with the DPJ's manifesto for last year's House of Representatives election. A prime example of this is an increase in the amount of child-rearing allowances.

Currently, a monthly payment of 13,000 yen per child is given to families with children. Because the DPJ manifesto stipulates 26,000 yen per child a month, the government will increase the monthly amount by 7,000 yen per child younger than 3 years old to bring the payments closer to the full amount. This will require about 210 billion yen in revenue in fiscal 2011.

In addition, the administration included funding in the budget for policies related to its election pledges for such things as making expressways toll-free and income compensation for individual farmers. Such actions are unbelievable, considering the government's lack of revenue sources.

The government has decided to increase taxes for high-income earners to mainly secure revenue for programs with increased budgets. This is a problem.

High-income earners support the Japanese economy, and their consumer confidence is high. Targeting them may invite a drain of talented people to foreign countries, for instance, which would work against the aims of the government. The government should immediately withdraw the tax hike plan.

When the government decides on recommendations for social security reforms, which were discussed concurrently with the budget compilation, it is highly likely to avoid any reform accompanied by an increased burden to taxpayers for such programs as health care for the aged and nursing care insurance.

The DPJ backed away from drastic reform ahead of the nationwide local elections next spring to avoid inviting a fierce reaction from voters. This is a shameful action for a ruling party.

Revise manifesto

As the fiscal 2011 budget was approved by the Cabinet, long-term debts of the central and local governments are expected to reach 891 trillion yen at the end of of fiscal 2011, or 1.84 times the nation's gross domestic product. The figure is far worse than even that of Greece, which suffered fiscal collapse.

To prevent the nation's finances from collapsing, sufficient tax revenues must be secured. It is clear that raising the consumption tax rate is the only measure. The consumption tax is also a dependable source of revenue for supporting social security programs.

The DPJ said in its 2009 manifesto that a huge amount of money can be squeezed from state coffers simply by correcting wasteful uses of tax revenue. Now everybody knows that was unrealistic.

Now, as we are at the end of the year, the Kan administration should decide to raise the consumption tax next year. It should also honestly admit its mistakes in its 2009 manifesto and drastically revise it.

Unless it overcomes these two important problems, the nation will be put on the wrong course and could face fiscal collapse.

(From The Yomiuri Shimbun, Dec. 25, 2010)
(2010年12月25日01時32分  読売新聞)


« クリスマスプレゼント^^ | トップページ | ラオス語辞書 »





« クリスマスプレゼント^^ | トップページ | ラオス語辞書 »