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EDITORIAL: Spending binge casts doubt on Ishiba’s vow of fiscal restraint | The Asahi Shimbun: Breaking News, Japan News and Analysis
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It is bound to trigger bloated public spending and end up leaving huge debt.</p> <p>How long does the government intend to continue such lax and reckless fiscal management? Prime Minister Shigeru Ishiba emphasized his commitment to fiscal discipline, saying, “We will not distribute handouts, but will compile expenditures in a measured and reasonable way.”</p> <p>But the bloated spending plan will inevitably expose Ishiba to criticism his actions don<span>’</span>t match his words.</p> <p>The government decided on the new package of measures to rev up the economy at a Cabinet meeting. Announcing a massive economic stimulus package has become an annual autumn ritual.</p> <p>Projects of dubious necessity and urgency have been added, and general account expenditures now come in at 13.9 trillion yen. This is comparable to the scale of measures taken in response to the global financial crisis triggered by the 2008 collapse of U.S. investment bank Lehman Brothers Holdings Inc. and the 2011 earthquake and tsunami disaster that devastated wide areas in northeastern Japan and precipitated the triple meltdown at the Fukushima No. 1 nuclear power plant. Given the current economic climate, the spending package is clearly excessive.</p> <p>In the aftermath of the COVID-19 pandemic, the government adopted a policy of returning swollen fiscal spending to normal levels. But this latest spending blueprint represents another example of failure by the government to deliver on its promise.</p> <p>A substantial portion of the funding for the package will come from additional government bonds, leading to further deterioration of the fiscal situation.</p> <p>Ishiba bears much of the blame for the troubling situation. As soon as the official campaign period for the Oct. 27 Lower House election began, he promised to draft a supplementary budget exceeding that of the previous fiscal year, setting the tone for a scale-oriented approach to formulating a new economic package.</p> <p>After the ruling coalition<span>’s </span>resounding defeat in the election, Ishiba incorporated budgeting requests from the Democratic Party for the People, which had sharply increased its seats, as he wooed the opposition party to win its cooperation in government management. This also contributed to the expansion.</p> <p>By law, supplementary budgets must be compiled only to finance “expenses that become particularly urgent due to reasons that occurred after the initial budget was formulated.” But recent administrations have blatantly disregarded this principle.</p> <p>This time, too, the spending plant contains a wide range of projects and programs, many of which are already in motion. Ishiba has joined the ranks of leaders who disregard the rules.</p> <p>Investments in the semiconductor industry and measures for greater national resilience represent mid-to-long-term policies. In principle, the investment approaches, scale and funding for these outlays should be scrutinized when drafting the initial budget, and only those that are absolutely necessary and effective should be selectively implemented.</p> <p>The extension and resumption of subsidies for gasoline, electricity and gas should not be overlooked as well. These steps impose a heavy fiscal burden and also benefit high-income earners and high-performing companies. These expenditures are also counterproductive to decarbonization efforts. The government itself had announced that gasoline subsidies would continue “only” until the end of the year.</p> <p>Measures to cushion the impact of rising prices of daily essentials are indeed necessary, but a more proper approach would be to switch to efficient methods focused on the needy.</p> <p>It is understandable to distribute benefits to low-income groups through local governments, but grants for local governments are also used to support a wide range of businesses. The Board of Audit of Japan has pointed out that the effectiveness verification and explanations concerning the spending of the grants are insufficient, and improvements in these areas are essential.</p> <p>The draft supplementary budget will be submitted to the extraordinary session of the Diet to be convened on Nov. 28. It needs to be thoroughly examined to correct the abnormalities highlighted here.</p> <p>This package of measures also calls for continuing discussions on DPP requests to expand basic income tax exemptions and cut the gasoline tax. While deduction increases matching inflation are necessary, these proposals raise many issues, such as significant reductions in tax revenue.</p> <p>It is unacceptable to cut corners in scrutinizing ideas that are eminently reasonable due to political motives.</p> <p>--The Asahi Shimbun, Nov. 23</p> <!--googleoff:index--> </div> <!-- ArticleText END --> <ul class="contentsTag"> </ul> <!-- related_news BGN --> <div class="related_news"> <h2>Related News</h2> <ul> <li> <a href="/ajw/articles/15516254"> <figure> <img src="//p.potaufeu.asahi.com/f56f-p/picture/29004011/cf6e0ca9824ee581235092337137e0e8.jpg" /> </figure> <div class="article_title"> <p class="title">LDP, Komeito, DPP compromise on economic stimulus package </p> <span class="date">November 20, 2024</span> </div> </a> </li> <li> <a href="/ajw/articles/15056345"> <figure> <img src="//p.potaufeu.asahi.com/c55e-p/picture/27943015/9cbe805af5cfdc8db40b46a73d241486.jpg" /> </figure> <div class="article_title"> <p 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