December 22, 2018

Japanese Communist Party Secretariat Head Koike Akira on December 21 published the following comment on the FY2019 draft budget which the Abe Cabinet approved earlier on the day.

The Abe Cabinet-proposed budget for the fiscal year 2019 will wreck people’s livelihoods and the Japanese economy with the consumption tax hike and will undermine peace and the Constitution with the massive military buildup. If implemented, it will wreck havoc on Japanese society.

The planned consumption tax rate increase to 10% will deliver a devastating blow to many people’s livelihoods and the Japanese economy overall as workers’ real wages and household spending have been stagnant, in addition to the continued decline in consumer spending. Fearing that the higher consumption tax rate would hurt the economy, the government in FY2019 plans to budget five trillion yen on “measures to prevent negative impacts from the consumption tax hike”. As a result, the size of the budget reached 101.5 trillion yen, up nearly four trillion yen from the initial budget for FY2018. The cancellation of the consumption tax hike is the best way to boost the Japanese economy.

Regarding social welfare services, measures included in the proposed budget will impose heavier burdens on the general public while cutting government spending. They are, for example, a drastic increase in premiums for the healthcare insurance system for the elderly aged 75 and over, a further slash in livelihood protection benefits, and an actual reduction in pension benefits through an application of the macroeconomic slide mechanism to the public pension system. The government claim that the sales tax increase is to provide “better social welfare services” is not accepted any longer. Prime Minister Abe boasted about the introduction of a program to make kindergarten and childcare centers free of charge. However, some expenses, such as meal charges, were excluded from the program. It became obvious that the program is full of holes.

The new “National Defense Program Guidelines” and “Mid-term Defense Program” will be inaugurated in the next fiscal year with military-related spending amounting to more than five trillion yen, an increase in the military budget for seven consecutive years. On top of that, the draft for a second FY2018 supplementary budget included additional spending of 399.8 billion yen. Ground-based anti-ballistic missile “Aegis Ashore” systems will be introduced. F-35A stealth fighters and Global Hawk surveillance unmanned aerial vehicles along with other military equipment will also be deployed. Of particular concern is that "Izumo"-class escort ships will be converted to aircraft carriers and that the FY2019 budget incorporates funds for R & D programs as well as funds for acquisition of long-range cruise missiles. The government compiled the budget to expand military spending in new areas (even in space-based weapons systems) in violation of the Constitution and to fully embark on creating a "war-capable nation". What is more, giving in to the U.S. Trump administration, Japan will purchase costly U.S.-made weapons at the U.S.-set prices under the U.S. Foreign Military Sales (FMS) program.

Many people are still suffering from the consequences of the 2011 Fukushima nuclear meltdowns and Japan's attempts to export nuclear power plants is now reaching an impasse. Nevertheless, the Abe government has increased the R & D budget to develop compact nuclear reactors. In the field of agriculture, the TPP and Japan-EU EPA free trade agreements have created concern over the extent of negative effects, but the government keeps focusing on only the expansion in size of farm holdings and productivity enhancement. The government in its budget allocations places priority on large public works projects, including the construction of more expressways and international strategic container port facilities. In contrast, it allots far too small budgets to improve education, employment, and small business activities.

Large corporations have posted record-high profits and the wealthy have increased the value of their assets thanks to Abenomics. An imposition of an appropriate tax burden on them and the cancellation of wasteful weapons purchase and large development projects will secure enough financial resources to improve people's livelihoods without a higher consumption tax.

The Japanese Communist Party, irrespective of differences in a person's stance on politics and taxation, will seek cooperation with as many people as possible "to stop the consumption tax hike to 10%" slated for October next year. The party will also make all-out efforts to recompile this budget so that the budget will put emphasis more on people, education, childrearing support, and social security.