Stop 3 trillion yen tax increase plan: JCP

A Japanese Communist Party lawmaker in parliament urged the government to cancel its plan to force the people to shoulder an extra burden of 3-trillion yen to maintain social services.

At the House of Councilors Budget Committee meeting on October 25, Koike Akira of the JCP criticized the Koizumi Cabinet for putting Japan's economy into a deeper crisis by further cutting social welfare programs.

The government plan, if implemented, will impose a heavier burden on middle income workers, Koike pointed out. For a 40-year-old worker who earns 5.6 million yen a year to support his family of four, premiums for medical insurance, pension, and nursing care will increase by 67,000 yen a year. If the special deduction for his spouse is ended, his family must pay an additional 100,000 yen the following year, Koike pointed out.

Also quoting figures of the five years from 1997, the average yearly wage for a worker dropped by 130,000 yen, and the total number of employees reduced by 2.59 million to 60.19 million, he showed that the number of the unemployed increased by 1.31 million to 3.61, the number of those acknowledged voluntary bankruptcy by 89,158 to 160,457, and those who committed suicides by 6,651 to 31,042 in a single year.

If the government pushes ahead with such a massive tax increase plan amidst such hardships, it will inevitably shrink consumers' confidence, damage household economies, and cause a deflationary spiral, Koike warned.

Prime Minister Koizumi Jun'ichiro had to recognize that his tax plan will somewhat affect consumers psychology since it will cause vicious a circle between increased burdens and deterioration in the economy. The prime minister, however, insisted on his tax increase policy.

The government, which has to examine how the economy will be if the plan is introduced, failed to do this, Koike pointed out.

On the pension issue, Koike referred to the recent rise on its slide-scale, which has been frozen for the three years under the rise in prices. As the price dropped, pensioners had to receive less, and this is affecting as much as 30 million people, including pensioners, said the JCP lawmaker.

The need now is for the government to take financial steps to encourage the public livelihood by drastically cutting the 50 trillion yen public construction projects (added up central and local government accounts) and the 5 trillion yen military budgets, Koike insisted. (end)