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HOME  > Past issues  > 2009 December 23 - 2010 January 5  > DPJ government fails to cut into budget ‘sanctuaries’
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2009 December 23 - 2010 January 5 [POLITICS]

DPJ government fails to cut into budget ‘sanctuaries’

December 26, 2009
The Hatoyama Cabinet on December 25 approved a government draft budget for FY 2010. Japanese Communist Party Policy Commission Chair Koike Akira (House of Councilors) on the same day published a statement on the draft budget. The full text reads:

The government approved its FY 2010 draft budget today. The Japanese Communist Party has been stressing the need to cut into “two sanctuaries,” generous tax breaks for large corporations and the wealthy as well as the enormous military budget, in a bid to make a drastic shift from the previous people-unfriendly budgetary allocations under the Liberal Democratic and Komei government. Yet, the first draft budget compiled by the Democratic Party-led government still maintains these sanctuaries. As a result, it has turned out to be an extremely inappropriate budget compilation in the light of the urgent need to improve employment, social services, and support for small- and mid-sized enterprises (SMEs) and people’s livelihoods. In contrast, the draft budget heavily depends on the issuance of a huge amount of government bonds and “non-tax revenues” or reserves and retained earnings.

In response to the public demand, the DPJ-led government plans to make improvements to a certain extent, such as providing child-rearing allowances and making public high school education free. However, it still remains far from meeting the demands of the people experiencing increasingly severe economic hardships. Although many people have called for a far-reaching expansion of social services, the government has decided that it will “put off” abolishing the controversial healthcare insurance system for the elderly aged 75 and over and will increase health insurance premiums. Its policies on employment and SMEs are not something that addresses the present serious situation. The draft budget is hardly in line with the DPJ election manifesto in which it called for a government “putting people’s lives first.”

Although the DPJ repeatedly stated, “Cuts in the wasteful use of tax money will ensure financial resources,” in practice, in order to cover the draft budget, the government has to issue a record-high amount of national bonds amounting to 44 trillion yen and depend on 10.6 trillion yen in reserves and retained earnings. The draft budget gives no guarantee of revenue resources in 2011 for the government’s new policies, including a child allowance system, and leaves the possibility open to impose the heavy tax burdens on ordinary people by abolishing the spouse and dependents deductions on taxable incomes and increasing the consumption tax rate.

The government avoided touching the military budget of 5 trillion yen, including the budget for helicopter carriers and the missile defense program and the so-called “sympathy budget”. The government increased the budget for the planned realignment of U.S. forces in Japan by nearly 50 billion yen and the budget for large public works projects. The government intends to keep tax breaks for large corporations and the wealthy, research and development programs and incomes from securities trading, and for those who inherit or are given large assets. Under the DPJ-led government policy, it is hard to stop the wasteful use of tax money in the military and business sectors, which the previous government had considered as “sanctuaries”. It is crystal-clear that this budgetary policy must be changed.
- Akahata, December 26, 2009
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