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HOME  > Past issues  > 2008 October 29 - November 4  > Government’s stimulus plan won’t protect the public from ailing economy
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2008 October 29 - November 4 TOP3 [ECONOMY]

Government’s stimulus plan won’t protect the public from ailing economy

October 31, 2008
Japanese Communist Party Chair Shii Kazuo said that Aso’s plan is aimed at invigorating major corporations, banks, and the wealthy, not at protecting people’s livelihoods during the economic downturn and that he has no intension to prevent such large corporations as Toyota and Nissan from implementing a storm of layoffs.

Prime Minister Aso Taro said, “I would like to ask for a consumption tax increase in three years.”

He stated this at a news conference he held on October 30 to announce an additional economic stimulus package.

Asked for a comment on this, Japanese Communist Party Chair Shii Kazuo said to reporters: “The prime minister said, ‘Most importantly, the government must take steps to resolve public concerns about living standards,’ but vowed to raise the consumption tax in three years. This will force further anxieties onto the public. How can he eliminate public anxieties while declaring a life-destroying consumption tax increase?”

Later in the day at another news conference, Shii argued that Aso’s plan is aimed at invigorating major corporations, banks, and the wealthy, not at protecting people’s livelihoods during the economic downturn.

He said, “Aso has no intension to prevent such large corporations as Toyota and Nissan from implementing a storm of layoffs.”

The government already gave large corporations five trillion yen in tax breaks by cutting their corporation tax rates instead of stopping major banks from refusing to lend money to smaller companies and abandoning their corporate social responsibilities. In addition, the stimulus package calls for an extra-tax break on capital investments and a tax exemption for profits of overseas subsidiaries. As for large asset holders, the government will extend the tax relief measure on dividends and capital gains from stock deals.

Shii pointed out that the package expands injection of public funds into banks but fails to require them to set goals to help small businesses.

Shii said: “Despite yielding large profits of more than two trillion yen a year, these major banks have paid little in taxes, and it is impermissible to pour tax money of ten trillion yen in tax revenues into them. The government measure cannot financially support small- and midsized enterprises.”

He said that the government intends to cut taxes by two trillion yen as a centerpiece of its stimulus package, “but,” he went on to say, “Since the Koizumi Cabinet, ordinary people have already shouldered an extra-burden of 13 trillion yen in forms of tax increases and cutbacks in social welfare services. Despite this, it tries to force the public to settle for just one-time tax cuts.”

“Such tax cuts will neither eliminate people’s anxieties nor lead to economic recovery due to the anticipation of a tax increase in three years,” said Shii.

He stressed the need to encourage the very foundation of people’s livelihoods to boost the country’s economy.

He stressed that to do away with the policy of holding down the annually-slated growth of 220 billion yen in expenditures on social services, which has caused the adverse changes in the pension system, nursing-care services, and medical services, will be a touchstone whether people will become better off or not.”
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