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2014年8月31日 (日)

概算要求 「選択と集中」で歳出の抑制を

The Yomiuri Shimbun
Use ‘selection and focus’ strategy to control growth of govt spending
概算要求 「選択と集中」で歳出の抑制を

Japan’s national debt already tops ¥1 quadrillion. Given the severe financial situation buffeting the nation, it is imperative to put the brakes on swelling state expenditures.

Total budget requests for fiscal 2015 have exceeded ¥100 trillion, the first time this line has been breached. The figure is significantly higher than the ¥96 trillion allocated for the initial fiscal 2014 budget.

The government’s goal of achie-ving a primary balance surplus for central and local governments in fiscal 2020 appears difficult to reach, even when revenue accrued from the hike in the consumption tax rate and other factors are taken into account. Given these circumstances, the Finance Ministry must screen budget requests even more strictly to weed out wasteful expenditures.

The government set a rule of capping requests for discretionary policy spending, such as public works projects, at 10 percent below the level of the fiscal 2014 budget.

Meanwhile, a “special spending quota” to be shared among priority policies of the administration of Prime Minister Shinzo Abe, such as promoting his economic growth strategy, have been allo-cated about ¥4 trillion. Requests to tap into this quota came in at the upper limit, pushing up the total budget requests.

Some requests for money from the special quota were conspicuously old-fashioned, such as for road construction on the pretext of helping to revive regional economies. Such requests need to be vigorously whittled down.

In some cases, different ministries and the Cabinet Office have made budget requests for similar policies. The Internal Affairs and Communications Ministry and the Land, Infrastructure, Transport and Tourism Ministry have both sought money for a project to establish regional core cities where hospitals, commercial complexes and other facilities would be concentrated.

The Finance Ministry will need to try to eliminate overlaps through its assessment of budget requests, and urge coordination between each ministry and headquarters set up for specific policy issues.

Ax dubious projects

Some projects of dubious value appear to have snuck into the requests to use the special spending quota.

The Health, Labor and Welfare Ministry has asked to establish a system that would provide subsidies of about ¥200,000 to companies that draw up plans to make better use of their female employees’ skills and experience. We wonder what sort of meaningful effect this scheme of lavishing money so widely and in such small amounts could have.

A closer look at budget requests by category reveals a considerable jump in public works projects.

Of course, we have no argument with investing money to protect the lives and assets of the people of Japan through repairs to aging roads and bridges and disaster-prevention measures to prepare for earthquakes, tsunami and landslide disasters.

However, the costs of public works projects are increasing due to skyrocketing material expenses and higher personnel costs needed to attract workers amid a labor shortage. Slashing nonessential and nonurgent projects through a policy of “selection and focus” has become even more important.

Snowballing social welfare costs show no sign of being reined in. The welfare ministry requested almost ¥32 trillion, which includes a natural increase of almost ¥1 trillion required to meet expenses inherent in a graying society.

Social welfare costs soak up almost one-third of government spending. Whether these expenses can be capped holds the key to restoring the nation’s fiscal health.

In addition to simple efforts such as expanding the use of relatively cheap generic drugs, the government will need to undertake major reforms that will not be pain-free, such as trimming medical and pension benefits. The Council for the Promotion of Social Security System Reform and other entities involved in this issue should speed up talks on such matters.

(From The Yomiuri Shimbun, Aug. 30, 2014)Speech


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