Government's budget proposal is tantamount to seeking to destroy living conditions -- Akahata editorial, December 25 (excerpts)
The Koizumi Cabinet on December 24 approved an 81.8-trillion-yen (680 billion dollars) budget proposal for fiscal 2003 starting on April 1. The government wants to force the people to pay more for medical treatment, cut pension payments, and increase the tobacco tax. In a word, the plan will only worsen the economic situation.
Akahata's editorial of December 25 commented on the draft budget as follows:
The government FY 2003 draft budget reflects the failure of the government policy of urging banks to write off bad loans, a policy that is forcing many companies out of business in accordance with U.S. demands, further deepening the economic recession and decreasing the tax revenue.
In fact, the government was obliged to compile a supplementary budget and issue a huge amount of additional national bonds because of a shortfall of about 2.5 trillion yen (about 21 billion dollars) in tax revenues. Clearly, the government's economic policy is to blame for the shortfall.
In the draft FY 2003 budget, tax revenue is 5 trillion yen (42 billion yen) less than the initial budget for FY 2002.
As a result, the amount of national bonds issuance and the government fund's dependency on bond issuance, which will be 44.6 percent under the proposed budget, will be the highest ever. This gives clear evidence to our charge that the Koizumi "fiscal reform" meant an increase in national debts undermining the national fiscal structure instead of rehabilitating it.
It is logical that if the government helps major banks to abandon small businesses by writing off their bad loans, the economy will go from bad to worse and will produce new bad loans.
To begin with, fiscal policy is one of the two policies available for the government to use in defending the people's livelihood at a time of an economic slump. However, Liberal Democratic Party governments in the last 10 years used fiscal and financial measures mainly to increase public works projects which only benefit general contractor construction companies and their supporting major banks.
If economic recovery is to be achieved, the biggest task now will be to help increase domestic demand, particularly in the household economy, which is the driving force for an economic recovery. It is necessary that the government implement a fiscal policy that will cut military expenditure and increase funding for improving people's livelihoods, focusing on efforts to provide better social services, job security, as well as assistance to small businesses. (end)