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HOME  > Past issues  > 2007 February 21 - 27  > JCP demands recasting of draft FY 2007 budget in order to reduce poverty
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2007 February 21 - 27 TOP3 [POLITICS]

JCP demands recasting of draft FY 2007 budget in order to reduce poverty

February 22, 2007
The need now is to enact budget to protect the living standards of the public by addressing two major problems -- the destruction of employment and the taxation and fiscal policy adversely affecting the living conditions.

The Japanese Communist Party on February 21 announced a set of proposals for drastically recasting the draft FY 2007 budget, entitled “For a budget to reduce poverty and social inequalities and to defend the living standards of the public and peace.”

JCP Secretariat Head Ichida Tadayoshi at a press conference said, “We will put forward these policy proposals in the parliamentary discussion on the government draft.”

The gist of the JCP proposals is as follows:

The living conditions of the general public remain far from the government claim that the nation’s economy is recovering. In fact, poverty and social inequalities are rapidly increasing.

  At least four million households are said to be “working poor” with incomes below the livelihood protection benefits. In the past five years, the number of workers who earn less than two million yen a year has increased by 1,570,000. The number of households receiving livelihood protection benefits has increased by 270,000 to 1,080,000, and the number of students receiving school expense subsidies has increased by 400,000 to 1,380,000.

In the background of the worsening living conditions is the destruction of sound employment pushed by the ruling circles and large corporations and the bad policies carried out in the name of “deregulation” and “structural reform.” There is a sharp contrast between the rapid decline in the number of regular employees and an increase in the number of contingent workers with exceedingly low wages.

Taxation policies and social security programs that are supposed to reduce poverty through income redistribution are not functioning at all. In fact, an OECD report showed that the poverty rate in families with children is increasing because their burdens of taxes and social insurance premiums exceed their social welfare benefits.

The need now is to enact a budget to protect the living standards of the public by addressing these two major problems -- the destruction of employment and the taxation and fiscal policy adversely affecting the living conditions of the public.

The draft FY 2007 budget, however, totally goes against this:

- It will worsen the living conditions of the public and further increase poverty by imposing a 1.7 trillion yen tax increase through the abolition of the fixed-rate income and residential tax cuts, by phasing out the additional assistance to mother-child families in the livelihood protection program, and by cutting the budget for employment measures by half.

- In contrast, the draft budget will provide generous tax breaks for large corporations and wealthy people.

- It will increase the wasteful use of tax money by preserving funds earmarked for road construction and setting out new public work projects, including the construction of super-hub ports.

- It includes expenditures for the realignment of U.S. forces in Japan and presses ahead with the operational integration of the U.S. forces and the Self-Defense Forces whose primary mission is overseas deployment, aiming at turning Japan into a nation waging wars abroad.

The JCP calls for the draft FY 2007 budget to be recast in order to reduce poverty and correct distortions in the Japanese economy.

(I) 5-point urgent demand for poverty reduction and in defense of living conditions

(i) Stop massive tax increases
The government plans to drastically increase taxes by discontinuing the fixed-rate income and residential tax reduction and by forcing the elderly to pay more in national health and nursing care insurance premiums. These plans must be scrapped.

(ii) Drastically raise the minimum wage and increase measures to improve employment
Japan’s minimum wage is at the lowest level among the developed countries and must be substantially raised. Cutting the employment-related budget by 211.2 billion yen, or half the previous year’s, must be stopped. The budget for occupational training and other measures to expand job opportunities must be increased. Working conditions of part-time and non-regular workers must be improved, and they should be treated equally with regular workers.

(iii) Stop abolishing and reducing additional benefits in livelihood assistance
Maintain and restore additional benefits in livelihood assistance for mother-child families and the elderly.

(iv) Stop invalidating national health insurance cards
The government must put an end to the policy of invalidating national health insurance cards of needy families and must secure the necessary funds for the reduction of and exemption from national health insurance premium payments.

(v) Cancel charges newly imposed on disabled people
The government must abandon the “beneficiary-pays principle” that imposes charges on disabled people for using services they require.

(II) Increase expenditure to support living standards, welfare services, education and small-sized businesses

The tax revenue in FY 2007 is expected to increase by more than seven trillion yen in the general accounts alone. Instead of wastefully using the tax money for reducing taxes on large corporations and the wealthy and for large-scale urban development projects, the government must use it for the defense of the living standards of the public, upgrading social welfare and education services, and addressing the needs of small-sized businesses and farmers.

Social welfare services and employment
Immediately raise the rate of state contribution to the basic pension funds to 50 percent in order to maintain the viability of the pension funds, and make further efforts to establish a fully state-funded system providing pension benefits that meet the minimum living standards.

In order to solve the problem of shortage of medical doctors, increase medical students, improve the working conditions of hospital doctors, and establish a public system to dispatch doctors to municipalities that are experiencing a shortage of doctors.

Rebuild the health insurance fund by drastically reviewing the unreasonably high prices of drugs and medical equipment, and defend and improve the health care system covered by the public health insurance.

Raise the rate of state contribution to nursing care insurance funds by 5 percent.

The government must abandon the plan to introduce a “white-collar exemption” system and solve the problem of excessively long working hours.

Education and child-rearing
Increase the rate of state contribution to the compulsory education fund from 33 percent to 50 percent. Increase the number of teachers, and reduce the number of students in classes to 30.

Establish a national system to provide free medical services to children.

Small- and medium-sized enterprises
Increase the budgets for small- and medium-sized enterprises to two percent of the general expenditure.

Agriculture and food
Establish a price and income support system in order for farmers to be able to reproduce their products.

Environment and energy
Drastically review the energy-related budgets prioritizing nuclear energy and increase the budget for natural sources of energy.

(III) Withdraw Japan-U.S. agreement on realignment of U.S. forces in Japan and Japanese Self-Defense Forces; Stop building a military suitable for overseas operations and strengthening base functions

Delete the budgets for implementing the realignment plan. Abandon the plan to form the Central Readiness Regiment, the core unit within the Ground Self-Defense Force Central Readiness Group that plans, trains, and commands the SDF units that are to be dispatched abroad.

Delete the Missile Defense-related budgets. Immediately withdraw SDF units from Iraq and the Indian Ocean. Delete the “sympathy budget” and the budgets related to the Special Action Committee on Okinawa (SACO).

(IV) Stop unilaterally reducing local government block grants; expand revenue sources of local governments

Claiming that local government expenditures should be severely restrained, the government is planning to cut 700 billion yen in the block grants to local governments in prospect of the reduction of welfare benefits and drastic cuts in local government staff. It should stop forcing local governments to implement “restructuring” and encourage them to have enough staff to meet the needs of residents, including education and welfare programs.

The government should fulfill its responsibility to provide local governments with necessary revenue sources in order for them to improve their measures for education and welfare programs, employment opportunities, and local economies.

(V) Start true financial reconstruction by cutting wasteful use of tax money and rebuilding taxation system based on the ability to pay

The government is promoting massive tax increases and cuts in budgets for social welfare services in the name of “financial reconstruction”. This will deal households a heavy blow and bring negative effects on the economy, thus making it harder for the national finance to be reconstructed. Now is the time to drastically review tax revenues and expenditures, secure adequate budgets for supporting the living standards of the public, and take a real step toward financial reconstruction.

Halt tax reductions for large corporations and the wealthy and require them to pay their fair share in taxes

The government is attempting to further reduce taxes on large corporations and the wealthy by reviewing the depreciation system and extending the preferential tax break for capital gains. The amount of these tax reductions simply offsets the amount of tax increases by abolishing the fixed-rate income tax cuts. Large corporations that are making record-high profits should pay their fair share in taxes.

Cut wasteful use of tax money for large-scale public works projects and military programs

Wasteful use of taxes on large-scale public works projects, including construction of beltways in metropolitan areas and gigantic dams, should be thoroughly reviewed, and the government policy on public works projects must be fundamentally changed.

The government must drastically reduce the 5-trillion-yen military budget and immediately abolish government subsidies to political parties.
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