2009 June 24 - 30 [
FINANCE]
Government budgetary decision is actually designed to buy votes
Akahata editorial
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June 24, 2009
The Cabinet led by Prime Minister Aso Taro on June 23 approved the basic plan for fiscal reform for FY2009 (April 2009-March 2010).
The question whether the 220 billion yen cut in the annual growth of expenditures for social services should be continued was settled when Finance Minister Yosano Kaoru stated, “There will be no cut in next fiscal year.”
Consumption tax increase is planned along with cutbacks in budget for social services
The government began to cut the annual growth of expenditures for social services in April 2002. In its basic economic policy for the FY 2006 budget, it decided to continue cutting the growth until fiscal 2011. This year’s basic economic policy clearly states that the appropriation reform will be continued in line with the basic policy for FY 2006.
What the government is saying is that there will be no cut in appropriation growth for the next fiscal year, but that it will maintain the basic policy of holding down spending on social services. It is using this rhetoric as an election campaign tactic.
Japan is aging, but the government spends only about 60 percent of appropriations for social services in relations to Germany and France, which are said to be ranked in the “middle” regarding funding for social services in the advanced capitalist countries.
By implementing the policy of spending less on social services, the LDP-Komei government is continuing to force the public to pay more and cut benefits in all areas. This makes it difficult for people who need social assistance to use the welfare services. Consequently, 80 percent of those who are eligible for public welfare assistance are denied the services they need.
The situation has worsened to the point where even successive Health and Welfare ministers say there is no room for any further cuts. The LDP-Komei government is responsible for the disastrous consequences of the policy of cutbacks in welfare services.
The urgent need now is for Japan to stop cutting welfare service-related budgets and drastically increase them.
We cannot overlook the fact that the LDP-Komei government is promoting cutbacks in expenditure on social services while at the same time calling for an increase in the highly regressive tax on consumption.
At the Council on Economic and Fiscal Policy meeting discussing the basic policy for fiscal 2006, Koizumi Jun’ichiro, the prime minister at the time, said, “It is necessary to continue cutting spending to the point where people begin to request necessary measures to be taken even if that necessitates tax increases. This is the way to reduce increases in the consumption tax rate.”
The “basic economic policy for fiscal 2006 Policy” calls for a merciless cut in the budget related to living conditions and use of a consumption tax increase to make up for fiscal shortfalls and balance the budget.
It is wrong to impose such a framework to continue to reduce the already inadequate social services until the public gives in and calls for help while raising the regressive consumption tax rate.
The government says that there will be “no budget cut regarding social services next year.” However, this obviously means that there will be cuts the year after next or that a deficit will be covered by a consumption tax increase.
Large corporations must be asked to pay according to their abilities to pay
The LDP-Komei government’s “structural reform policy” increased the poverty rate and seriously undermined ordinary people’s livelihoods. The Japanese economy and society can no longer shoulder the financial burden caused by cuts in social services and consumption tax increases, which is a highly regressive tax.
The amount of reduced government expenditures on social services should be recovered without delay.
The possible option of increasing government revenue is to decrease its extremely favorable treatment of business circles and big companies which are benefiting from various tax breaks and depend on extremely low welfare payments compared to western European nations.
The wealthy also must shoulder a fair burden because they enjoy a variety of tax breaks related to personal income, personal property, and investment income.
- Akahata, June 24, 2009
