Though passed in Lower House, FY 2009 budget bill lacks any sense of crisis and offers no effective measures

Japan Press Weekly

Japan Press Service Co., Ltd. is the only news agency providing information of progressive, democratic movements in Japan

Though passed in Lower House, FY 2009 budget bill lacks any sense of crisis and offers no effective measures

Akahata editorial

The Liberal Democratic and Komei parties on February 27 used the force of numbers to railroad through the 88-trillion yen budget bill in the House of Representatives.

That was a couple of days after the House of Representatives Budget Committee summoned witnesses on February 24 regarding the issue of employment, which confirmed the need to summon business leaders as well as executives of major corporations, who have been destroying the job market, to answer questions. Clearly, the Diet deliberation on the Budget has been grossly insufficient.

The Aso Cabinet and ruling parties often state that the present economic crisis is one that occurs only once every 100 years. But they are not serious enough to try to stop the economic downturn. They instead used cozy relations with the Democratic Party to bulldoze the budget bill through the House of Representatives. The Democratic Party also put all its energy in politicking and never demanded that the budget plan be rewritten.

Halting further economic downturn

The Japanese government policy of promoting economic growth through exports at the cost of jobs and the household economy has fundamentally failed after the financial crisis that originated in the United States hit Japan. Toyota and other top-ranked corporations have responded to falls in their exports by shifting their losses onto those in the economically weakest position such as temporary workers and small- and medium-sized subcontractors. With domestic demand shrinking, large corporations simultaneously resorted to layoffs of temporary workers and bullied subcontractors even in violation of the current laws. This worsened the Japanese economy more quickly than in the United States.

As Japanese Communist Party Chair Shii Kazuo revealed at a House of Representatives Budget Committee meeting, many contingent workers whose terms of contract have not yet expired are being laid off and that there are companies that use temporary workers in the guise of independent contractors in order to avoid having to offer them full-time positions.

The Diet needs to focus on major corporations' violation of the Act against Delay in Payment of Subcontract Proceeds. Etc. to Subcontractors, because they urged subcontractors to accept drastic cuts in unit prices and order quality.

This is only the tip of the iceberg regarding their illegal treatment of subcontractors. It is necessary for the government to carry out inspections and increase the inspection staff.

The government must put an end to the lawlessness of corporate behavior by strictly applying the current laws. It should immediately call on major banks to end the reluctance to provide new loans to small- and medium-sized enterprises (SMEs), stop the forcible debt collection policy, and guarantee SMEs funding at the end of the business year by applying the credit guarantee system to SMEs of all categories.

It is essential for the government to withdraw its policy of the annual 220 billion yen cut in budget growth in social services, which are a lifeline for many needy families, and to change its policy to one of improving social services.

The government budget plan includes no measure to stop the mass layoffs of contingent workers and the abandoning of suppliers as well as the major banks' reluctance to lend money. It clings to the policy of holding down expenditures on social services. Finance Minister Yosano Kaoru rejected the call for policy change, saying, "We are implementing the principles set forth in the 2006 basic policy. We cannot stop it now."

The government budget plan, if enacted, will offer large corporations that are making inroads abroad new tax breaks and extend large tax cuts on capital gains.

The government has no measure to prevent a further economic downturn. It is not willing to change its policy from one dependent on exports to one driven by the growth of domestic demand. Continuing with the existing budget policy will only accelerate the vicious circle of declines in domestic demand and further economic downturns.

Withdraw consumption tax increase plan

Both the government and the ruling parties are intent on raising the consumption tax rate. This clearly shows that they are not seriously concerned about the need to rebuild the Japanese economy.

In sharp contrast, the U.S. Obama administration in its fiscal policy proposed a tax increase for the wealthy by stating, "If your family earns less than $250,000 a year, you will not see your taxes increased a single dime."

If the government is serious about its economic policy, it should withdraw the consumption tax increase plan and promise the general public that there will be no tax increase.

- Akahata, February 28, 2009