'Pay tax or go bust' is hard choice for small businesses under Koizumi Cabinet's policy

Akahata of March 19 ran a story of the plight of small-and medium-sized businesses operating under two years of the Koizumi Cabinet.

Masumura Yasuhiro, who runs a small printing shop in Shinjuku Ward in Tokyo, said, "In these two years, large corporations were endowed with great favors, while small-and medium-sized businesses were abandoned."

36,000 small-business failures

The Liberal Democratic-Komei government under Prime Minister Koizumi abandoned small- and medium-sized businesses suffering from worsening business conditions under the government's failed economic policy by ordering major banks to write off their bad loans, resulting in many bankruptcies.

Under the Koizumi "reform" policy, the sales turnover and earnings for small- and medium-sized businesses have remained depressed.

Monthly surveys of the business of small- and medium-sized companies throughout Japan, compiled by the national center for small- and medium-sized business organizations, show that the sale index, which was minus 37.1 in March 2001 a month before the Koizumi Cabinet took office in April, fell by 6 percentage points to minus 43.1 in January 2003. The earnings index fell further to a minus 63.8 in January 2002 from minus 46.7 in March 2001. In January 2003, the index stood at minus 56.9, reflecting the plight in which these businesses are in.

The two years of the Koizumi government brought about the demise of many small businesses. The number of business failures in 2001 was 19,441, the third largest in the postwar period, followed by 19,458 in 2002.

The number of business failures in the period from May 2001 soon after the Koizumi Cabinet took office to February 2003 is 35,781 (survey by Teikoku Data Bank of companies with debts of 10 million yen or more). Over 99 percent of these failures are small- and medium-sized businesses.

Petty business in greater difficulty

Petty businesses are the ones that are hit hardest among small- and medium-sized businesses.

The number of self-owned businesses, accounting for 51 percent of private-run businesses, declined by 357,000 from 1997 to about 3.13 million in 2001. These businesses employ 9 million people.

The small and petty businesses have been dealt a deadly blow under the Koizumi LDP-Komei government policy of increasing people's burdens for social services. The 10th business survey of self-employed and other small businesses, taken on November 2002 by the National Federation of Merchant and Industrialist's Organizations, showed that 35.3 percent of the respondents, the highest percentage, find the payment of premiums for health insurance systems their biggest headache.

A small printing shop owner said, "It is said that the dilemma facing small- and medium-sized businesses is that if they pay taxes, they can't keep their business, and vice versa. Now the Koizumi government is planning to impose the increased burden of a higher consumption tax on petty businesses. We oppose this." (end)

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