August 2, 2012
The Noda Cabinet on July 31 approved a new growth strategy laying out economic goals for FY 2020.
Whatever the “revitalization strategy” is, the Japanese economy would not have a chance to revive if an increase of more than 20 trillion yen as a result of cuts in social welfare benefits and a raise in the consumption tax (\13.5 trillion) are imposed on the general public.
The strategy this year deletes the phrase “people’s lives first”, though this was a campaign promise the Democratic Party made to voters. On the contrary, the strategy inserts the demands of business circles to the maximum extent.
Tough for people, easy for large development projects
Each time the DPJ government crafts a growth strategy, it cozies up ever more to the business community.
The goal of “an increase in the minimum wage” set in past strategies has disappeared from this year’s strategy.
It focuses on an overhaul of the use of the general budget “without sanctuaries” despite taking aim at only cuts in social welfare spending.
This fiscal year, the government has refused the rate for corporate taxes by 4.5% (the full introduction of the tax break will take effect in FY2015). However, the new strategy considers providing further corporate tax breaks after 2015 as well.
Another airport in the Tokyo metropolitan area, international strategic ports and harbors, and the development of an expressway network are the items the “revitalization strategy” promotes. A tax hike bill currently being discussed in the Diet incorporates a clause which specifies some portions of an increase in tax revenues to be used for large development projects. The government again favors large public works projects together with an increase in the consumption tax rate.
The strategy still clings to the restart of the operations of the nation’s nuclear power plants and Japan’s participation in negotiations over the Trans-Pacific Partnership (TPP) agreement in defiance of the mounting public opposition.
In drafting the “revitalization strategy”, the Noda Cabinet invited top business executives such as Chairman of the Japan Business Federation (Nippon Keidanren) Yonekura Hiromasa to the Cabinet Secretariat and set up the National Strategic Council. This is similar to the Council on Economic and Fiscal Policy under the former Koizumi government (Liberal Democratic Party) as a propulsion engine for the structural reform, expanding unstable employment, forcing the public to shoulder ever more burdens, providing tax cuts for large corporations, and cutting the country’s social welfare spending.
A member of the National Strategic Council, who presided at a workshop which made a rough draft of the “revitalization strategy”, reportedly said, “I will proceed (with discussions) by referring to examples from the Keidanren proposal.”
In fact, a workshop report states the real intention which is hidden in the “revitalization strategy”. For example, the report proposes that with the usage of limited-term employment, a mandatory retirement age of 40 can be introduced. This would create a society centering on insecure jobs, in which even regular employees would face termination of job contracts at the early age of 40. With the Japan-U.S. military alliance as an essential component, the report even touches on a change in the government interpretation of the Constitution, which prohibits Japan from exercising the right of collective self-defense and using armed force abroad.
What the workshop was aiming for was the creation of a society working in the interests of large corporations and a Japan capable of engaging in wars abroad under the leadership of the United States.
DPJ no longer capable of coming up with catchphrases that will gain public support
The DPJ government growth strategy had pursued a “change from the LDP-Komei politics” suggesting a “third way”, leaving aside whether it would implement such policies. However, this time the strategy only uses meaningless slogans such as “the frontier nation”, “co-creative state”, or “change of the economic growth paradigm”. The administration seems to be surrendering to the business community’s requests, betraying the wishes of the general public. It is now unable to come up with catchphrases that will generate public support.
It is absolutely necessary to discard the bill to increase the consumption tax rate and drastically change the conventional economic policy only in favor of big businesses into another to boost people’s incomes. The key to such a change is to completely break away from the old policy favoring large corporations and financial circles.