Takaichi Insists Independence on Governmental Bonds

The Diet held a debate between Prime Minister Sanae Takaichi and opposition leaders, or Question Time (QT), for the first time in current session on May 20th. Asked about measures for relief on recent economic difficulty with shortage of resource and price inflation, Takaichi unequivocally announced that she would deliver a supplementary budget, on which she had once been negative. She argued that she had been preparing for it. 

Following the result of the Lower House election in February, the roster of opposition leaders has significantly been changed. Although the first questioner had been the leader of Constitutional Democratic Party of Japan (CDPJ) in the last session or before, it was replaced by the leader of Democratic Party for the People (DPP).

 

As CDPJ formed Centrist Reform Alliance (CRA) with merging with Komeito in the Lower House in January, and CDPJ and Komeito remains as themselves in the Upper House, the leaders of CRA, CDPJ and Komeito respectively asked their question to Takaichi. While new populist parties, including Sanseito and Team Miral, joined the debate, Japan Communist Party was dropped.

 

In the Diet discussions, Takaichi has insisted that it was not a situation in which a supplemental budget would be needed. However, effective blockade in the Strait of Hormuz caused fundamental concern on supply of oil-oriented chemical products and price hike of them. Takaichi administration faces a necessity of additional economic policies with a supplemental budget.

 

“In case mobilization of budgetary reserve is not sufficient, I consider a supplemental budget to deal with the situation in the Middle East,” said Takaichi in the debate. Some opposition leaders pointed out that her decision was too late. Takaichi argued that she had been indicating a supplemental budget, referring to changes of her negative nuances with “so far,” “immediately” or “at the moment of today.” But Takaichi has been denying a supplemental budget to implement her fiscal reform.

 

Takaichi stressed that she would not rely too much on issuance of governmental bonds. At the time she delivered economic stimulus plan last November, stock market, Japanese yen in foreign exchange and bonds market showed simultaneous lows with concern on exacerbation of financial balance of the government. With speculation of another supplemental budget, markets in Japan responded with skepticism toward Takaichi administration. Takaichi had to send a message on her financial management.

 

Takaichi also attributed current shortage of naphtha in supply chain of Japan. Some companies have taken measures to compensate shortage of naphtha. It was widely reported, giving consumers a shock, that a food maker, Calbee, changed its package of potato chips into black and white, caused by shortage of color ink made from naphtha. Takaichi reiterated that naphtha is “filtered,” indicating that it is blocked in some points even how the government pushed into the market.

 

“Filtered” is the phrase that the government, mainly bureaucrats, is escaping responsibility to a failure of providing necessary materials to the people. At the time of COVID-19, Ministry of Health, Labour and Welfare repeated that vaccine was filtered in somewhere, although the government kept on sending. Takaichi insistence that Japan has enough naphtha may cause further skepticism on information from the government.

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