Japan Press Weekly

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2008 June 4 - 10 [FINANCE]

Government panel proposal for next FY budget is far from reducing hardships

Akahata editorial

The government Fiscal Policy Council has completed its proposals concerning the national budget for the next fiscal year starting April 1, 2009.

Succeeding to the Koizumi Cabinet’s basic fiscal policy dubbed as the “big-boned” reform policy of 2006, the panel calls on the government to stand firmly for the policy of slashing the yearly growth of costs for social services by 220 billion yen, or 1.1 trillion yen in five years.

It calls for restraints on expenditures for medical, nursing-care, and welfare programs. It also proposes abolishing the state share of costs for employment insurance and rejecting an increase in the budget for education.

Disastrous policy

The Fiscal Policy Council in its proposal states that the “big-boned” reform policy should contribute to building a society for all people to live free of anxieties for many years to come by retaining social services and helping the economy continue to grow.

Ever since the Koizumi Cabinet set the course of restraining budget growth in social services, the government has increased the pension premium rates every year and made medical and nursing care services unaffordable for many people. These adverse policies have driven many people out of social security. Prime Minister Fukuda Yasuo’s cabinet has imposed the new discriminatory health insurance system for the elderly aged 75 or older by forcing them to pay more for medical costs.

The LDP-Komei government has cut expenditures on welfare assistance to single-parent families and the elderly who are barely able to make the ends meet. A number of people have starved to death or committed suicide after they were denied livelihood assistance. Restraint on budgets for social services is denying the people’s right to live.

The LDP-Komei government has been easing regulations in various areas in response to the demands of business circles, resulting in an increase in the employment of contingent workers as well as an increase in the poverty rate. This, coupled with the recent adverse “reforms” of social services, has increased public uncertainty about the future. In a recent nationwide Cabinet Office survey, 69.5 percent of the respondents said they are concerned about what might happen to them in the future. The percentage is the highest since this survey began.

In the same survey, more than 20 percent said they have no savings at all. The percentage of people who said that their savings is less than one million yen doubled during the last several years. Ordinary people’s living conditions are in a no-way-out situation. .

The government “structural reform” policy that led to a drop in after-tax income has “structurally” discouraged people from spending money. The government’s most recent economic report negated the view that better business performance will help improve the family budget.

The Bank of Japan’s “Outlook for Economic Activity and Prices” no longer asserts that Japan is maintaining “the mechanism of sound circulatory relations between production, earnings, and expenditures” and that “business sectors in good conditions have a knock-on effect on personal spending.”

This shows that the government assertion that an increase in large corporations’ earnings will help to improve the household economy is a lie.

If the government continues to cut expenditures on social welfare programs, it will undermine and deprive the general public of any sense of economic security and make it impossible to achieve the country’s economic stability.

Even within the ruling parties, some politicians are calling for no more cutbacks in the social welfare expenditure. This is an expression of the recognition of the sharp contradictions in the government’s basic economic policy. However, at the same time, many of the ruling party politicians are calling for a consumption tax increase.

In response to this, the Fiscal System Council proposal stresses the need for an “immediate overhaul of the whole tax systems, including the consumption tax.”

Change ‘upside-down politics’

The consumption tax is a regressive tax that imposes heavier burdens on low-income earners, while allowing major corporations to shift their tax burdens onto an increase in retail prices. This is a completely unequal tax that works against any social welfare systems. Once the consumption tax rate is raised, it will throw the general public into “poor welfare services but with high burdens,” which will make Japan’s financial failure more obvious than ever.

Former Prime Minister Koizumi Junichiro pushed ahead with budget cuts, saying that the public would eventually begin demanding that “the government stop cutbacks in return for tax increases.”

We will fight to overthrow the basic economic policy that benefits major corporations with big tax breaks while shifting heavier burdens onto the general public. It’s time to end the “upside-down politics.” - Akahata, June 4, 2008