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2011年7月 3日 (日)

社説:消費税引き上げ 覚悟が伝わってこない

PM must show determination to raise consumption tax
(Mainichi Japan) July 2, 2011
社説:消費税引き上げ 覚悟が伝わってこない

The executive branch of the government and ruling coalition policymakers have watered down the government's original plan on the integrated reform of the tax and social security systems by obscuring the timing of the proposed consumption tax hike.

It appears as if the administration of Prime Minister Naoto Kan admitted that it is not enthusiastic about carrying out the reform, even though the prime minister declared that he will stake his political career on the reform.

The original plan clearly stated that the 5 percent consumption tax would be raised to 10 percent by fiscal 2015, but the deadline was changed to the "mid-2010s" in the final plan in response to protests from many ruling Democratic Party of Japan (DPJ) legislators.

Moreover, the final plan states that the consumption tax can be raised only if the economy has been pulled out of recession.

State Minister for Economic and Fiscal Policy Kaoru Yosano explained that the mid-2010s means sometime from fiscal 2014-2016.

It is true that if the consumption tax hike is delayed by one year to fiscal 2016, it will not drastically worsen the state's fiscal situation; state finances are already in critical condition.

However, the settlement of the intraparty dispute over the consumption tax hike has two major problems.

One is that the failure to set a clear deadline for the tax hike has sent a negative message to the public.

If the government were truly enthusiastic about the tax hike, it would have specified the timing.

Its failure, coupled with making economic recovery a condition for the tax hike, could fuel speculations that the government is trying to concoct reasons for postponing it.

The other problem is that its failure to specify the timing of the tax hike could hinder overall tax and social security system reforms.

Unless the timeframe for the consumption tax rise is determined, the government cannot work out details of the social security system reform that is inextricably linked to tax system reform.

Since the Cabinet has not given the final OK to the reform plan, the government cannot even begin to draft relevant bills or hold consultations with opposition parties over the plan.

Major industrial democracies declared at their conference in Canada last year that they will halve their budget deficits by 2013.

However, Japan, whose fiscal situation is critical, was allowed to set the loose target of halving its primary balance deficit by fiscal 2015.

However, since Japan cannot even pledge to raise the consumption tax rate to 10 percent by fiscal 2015, doubts have been raised over whether it can achieve even such a loose deficit-reduction target.

The international government bond market has been interested primarily in Europe, where Greece's fiscal crisis has drawn particular attention.

On the other hand, Japan has been able to issue extremely low-interest government bonds although its deficit level is the worst of all developed countries.

Still, the focus of the market could shift to the United States and Japan at any time.

Despite the low interest rates, Japan spends approximately 10 trillion yen on interest on government bonds annually.

If the rating of Japanese government bonds continues to be downgraded and their interest rates rise sharply as a result, it will prevent the government from proactively reforming its tax and social security systems as payment on debt swells.


To achieve its reforms, the government must promptly work out details of the specific reform plans, including the timing of the tax increase.

The largest opposition Liberal Democratic Party (LDP), which had been in power for decades before the DPJ, is also responsible for Japan's critical fiscal situation.

Therefore, we urge the DPJ-led ruling coalition and opposition parties including the LDP to quickly begin consultations on tax and social security system reforms.


It is a major task for Japan, which will have impacts on our livelihoods over the coming decades.

毎日新聞 2011年7月2日 2時31分


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