Fukuda says time is ripe for decision to increase consumption tax rate

Japan Press Weekly

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

Fukuda says time is ripe for decision to increase consumption tax rate

Prime Minister Fukuda Yasuo gave his view that a consumption tax increase is unavoidable.

He stated this during an interview by news agencies from the Group of Eight (G8) countries on June 17.

He said, “In Japan, a rapidly aging society, the consumption tax rate is held at five percent. This is why its fiscal deficit has increased so much. Something must be done about it. Now is a crucial moment.”

By arguing as if an increase in government expenditure on social services in connection with the growing aging population has triggered the present fiscal crunch, Fukuda is trying to justify the consumption tax increase.

This argument is wrong in that the budget shortfalls are mainly due to the upside-down budget allocation in the 1990s that squandered 50 trillion yen for public works projects while spending only 20 trillion yen on social welfare services.

The Fukuda Cabinet has slashed 220 billion yen in the natural growth of the budget for social services, a policy begun by the predecessor cabinet led by Prime Minister Koizumi Jun’ichiro, while continuing to construct expressways. It has no intention to stop giving generous tax breaks to the wealthy and large corporations or slashing the 5-trillion yen-a-year military budget. - Akahata, June 18, 2008