Skepticism on Achieving Fiscal Soundness

The Fumio Kishida Cabinet made a decision to fix Basic Policy on Economic and Fiscal Management and Reform (Honebuto) 2024 on June 21. The annual plan on handling of economy and fiscal policy this year insisted on completely getting rid of deflation, making little difference from previous years. There still remains a skepticism on whether Kishida can be successful in achieving both growth and fiscal soundness.

Honebuto 2024 was made by Council on Economic and Fiscal Policy, which members included six ministers of Kishida Cabinet including Kishida himself, Governor of Bank of Japan and four business leaders. Based on request of the prime minister, the council members discuss economic and fiscal policy and submit their opinion on those issues every year.

 

The council basically supported the policies taken by Kishida Cabinet. “Economy of our country is facing one opportunity in a thousand to completely get rid of deflation and achieve growth-oriented economy,” said the Honebuto 2024. The phrase was exactly the same as what Kishida reiterated in the discussion of the Diet. It concluded that the important thing in management of economic and fiscal policy was moving Japanese economy to a new stage.

 

What does the “new stage” mean? Honebuto proposes Economic and Fiscal New-born Plan. The plan recommends two shifts. One is a shift from distribution of resources for urgent needs such as consumer price, wage or interest, to potential growth rate which indicates possible mid- and long-term economic growth of a country when it mobilizes all the necessary elements for production.

 

Another is achieving sustainable fiscal policy by reducing the balance of debt against GDP. It is indispensable for the government of Japan to deal with rising interest rate of governmental bonds, volatility of world economy, natural disaster or pandemic for securing confidence of the market on the fiscal policy.

 

The government will make efforts to go to the new stage by continuing economic and fiscal reform for six years between 2025 and 2030. The reform woill be raising productivity, more opportunity for job participation or raising birth rate. Each of those issues has nothing new, because Kishida administration has been tackling on them and has achieved no significant improvement. The plan is, after all, continuing what he has been doing.

 

The key is how to reduce the debt. The council maintained the goal of balancing fiscal revenue and spending by 2025. What would they do for it? They will continue their effort to reform the spending. Actual policy will be considered in the process of building budget every year. It is hard to understand for anyone what is new in the Kishida’s economic policies.

Comments

Post a Comment

Popular posts from this blog

Amendment of Local Autonomy Law

The House of Representatives started discussion on revision of the Local Autonomy Law, which would vest the national government a power to instruct local government in an emergency. It may change the relationship between the national and local government, which has been recognized as equal. The opposition parties oppose the amendment, arguing that it would give the national government an excessive power.   With the Meiji Restoration, the national government abolished the feudal system, introducing modern governance. However, its autonomy was not sufficient. The governor of each prefecture was appointed by the national government. The local governments subordinated to the national government. It was as late as 2000 when  the Comprehensive Decentralization Law  was enacted and the relationship between the national and local government was defined as equal.   The national government found inconvenience in the relationship between the national and local government, when ...
Read more

Request for Final Nuclear Disposal Site

Ministry of Economy, Trade and Industry requested Genkai Town, Saga, to accept “literature survey” for building a final disposal site for high-level radioactive waste. Genkai is going to answer within this month. If it accepts, it will be the third place to accept that survey, following two places in Hokkaido. Main reason to accept the survey is supposed to be subsidy from the national government.   Japan has no final disposal site. Among all 54 reactors in 17 nuclear power generation plant, 12 reactors of 6 plants are operating. The rest of them are not in operation, some of which are determined to be decommissioned. Used nuclear fuels are stocked in each plant, 　 or have sent to a reprocessing plant in Rokkasho, Aomori. There are two plans to stock nuclear wastes in the intermediate facility for disposal, one is already built and another is still in negotiation.   Nuclear Fuel Final Disposal Act in 2000 determines to bury nuclear waste in the underground. Literature survey, ...
Read more

Not A Royal Wedding

The bride called her husband an indispensable existence and their marriage was necessary choice to protect their mind. The groom insisted on his life as only once and his right to be with his loved one. Her father wanted his daughter’s marriage to be celebrated by the people. The people were not sure whether the family was happy as a whole. Is this the traditional Japanese social system that makes no one happy? Mako Komuro, as known as Princess Mako during her life in one of the royal family Akishino, held on Tuesday a press conference with her husband Kei Komuro, right after submitting marriage report to local government. It was something different from ordinary Q&A session, because Mako was afraid of her mental uneasiness brought by some questions not based on truth. So, the event was actually one-sided speech to the reporters. Mako emphasized that the Kei’s decision of studying abroad five years ago had not been his original idea, but a result of her request to establish an over...
Read more