Government draft budget is marked by reverse priorities of what's needed --
Akahata editorial, December 25, 2001

The Koizumi Cabinet approved a government draft budget for fiscal 2002
(Apr. 2002-Mar. 2003). It touted the draft as getting the points in relation
to priorities being given to a few key items such as urban renaissance in
spite of the fact that general expenditure is reduced.

The question is whether proposed cuts and increases are correctly
reflecting what the national economy and the people's livelihoods need.

Unreliable "key sectors"

The "key sectors" which the government refers to as priority sectors for
budget allotment include an urban loop highway and other construction
projects under the cover of IT (information technology). The mass media
criticize the draft budget as "being no better than before."

The government boasts that it has cut one trillion yen in public
investments. But the scheduled advance payment of 2.5 trillion yen from the
second supplementary budget for fiscal 2001 will increase funding for public
investment by 1.5 trillion yen. The military budget, which the government
regards as untouchable, gets an increase, and the 70 trillion yen framework
for supporting major banks is kept intact.

Budgets for medical services and other social services were slashed,
imposing heavier burdens on the people. The education budget was cut, by
which interest-free scholarships for 16,000 students have to end and an
increase in tuition fees at national universities will be imposed from
fiscal 2003. The budget for small- and medium-sized enterprises was cut by
10 billion yen.

Budget increases are exclusively concerning large corporations, major
banks, and the military. Budget reductions are for the people's livelihood
and small- and medium-sized businesses. This is the government budgetary
priority.

The "Koizumi recession" has totally disrupted the Japanese economy,
causing the domestic demand led by household consumption to collapse. This
has put the economy into a vicious spiral of further falls in production and
employment.

One thing is clear. Unless household economies are rehabilitated and
personal consumption expanded, this crisis cannot be overcome. It is
necessary for the government to drastically change its fiscal policy from
giving favors to large corporations and banks to one of giving top priority
to the people's living conditions.

These are the priorities that the government must show in its draft
budget. The draft budget which the government adopted is just the opposite
of what is needed.

What is the difference between past Liberal Democratic Party governments'
budgets and the present draft?

For example, the Hashimoto Cabinet shifted the fiscal deficits onto the
people in the form of an increase in the consumption tax rate and in medical
charges only to make the economy far worse and further undermine the fiscal
base. Both the economy and national finances came to a crisis because it
took the household economy to task, instead of supporting it.

The Koizumi Cabinet is going to carry out the same wrong policy in an
unprecedented large-scale economic recession.

Its fiscal management to counter cyclical changes is no different from
past LDP cabinets in that it exclusively resort to the conventional type of
public investments and support for major banks.

The Koizumi budget is actually bankrupt.

A clear indication of it is the government's "public promise" concerning
the national bond issue to be limited to 30 trillion yen. The upper limit is
nominally observed. But the reality is that the figures are rigged to
include "invisible deficits" to make both ends meet.

No "reform" in any aspect

Economic and Fiscal Minister Takenaka Heizo explained that the
accumulated fiscal deficits will have the effect of discouraging consumption
because the people anticipates increased burdens in the future, and this
leads to a restraint in the issuance of national bonds. This is a stretched
interpretation intended to conceal the actually increasing fiscal deficit.

The Koizumi budget is outrageous in that it unjustly shifts the blame of
fiscal crisis onto the people and then puts into practice what people are
worried about, that they will be made to pay more in the end. Such a policy
is not "reform" in any respect. (end)