Underlying cause of finance minister’s resignation is confusion on budget drafting

Japan Press Weekly

Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Underlying cause of finance minister’s resignation is confusion on budget drafting

Finance Minister Fujii Hirohisa resigned just before a discussion on the FY 2010 budget draft begins in the ordinary Diet session which is a crucial moment for the Hatoyama Cabinet. For the Hatoyam administration, this may cause serious damage.

Fujii reportedly resigned for health reasons, but the underlying cause of his resignation in fact is the serious confusion regarding the proposed budget.

Contradiction with public interest

In contrast to the Democratic Party of Japan’s promises in the 2009 August general election, the DPJ-led government decided to postpone abolishing the discriminatory health insurance system for the elderly aged 75 and older, and to not reinstate additional benefits for the elderly in the livelihood protection program. Although the DPJ said that 30 billion yen is necessary to remove the beneficially-pays system from the law to promote the self-support of disabled persons, the allocated budget amounted to only 10 billion yen.

The draft budget is counter productive because it relies on a huge national bond issuance amounting to 44.3 trillion yen and 8 trillion yen in non-tax revenues. The reason why this has happened is that the government could not touch the “two sanctuaries”, the military budget and tax breaks for large corporations and the wealthy. While the government budget screening process got public attention, the government increased the military-related budget, including the procurement of a 120 billion yen helicopter carrier for sending the Self-Defense Forces abroad, the budget for the planned realignment of U.S. forces in Japan, and the so-called “sympathy budget.”

Because the government yielded to the business circles’ demand to continue to evade corporate burdens for social welfare services, it is unwilling to change its policy to one of increasing the budget for social welfare programs.

The draft budget shows the increasing conflict with public expectations for a drastic change from the former government’s policy.

Continuity is questionable

A DPJ lawmaker stated, “Confusion on the budget drafting procedure exposed the fact that the revenue resources that the DPJ had stated it would procure during the election campaign are unsecured and groundless. The government draft budget failed to keep many of the DPJ’s election promises. Fujii knows well enough that the draft budget is a huge ‘inflated budget’ and that whether financial resources can be secured or not will become a question of concern. In addition to his bad health, he lost confidence in his ability to ride out the upcoming severe debate on the draft budget.”

- Akahata, January 7, 2010