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2013/02/05
Kishimoto criticizes Abe administration’s fiscal policies
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On February 5, Member of the House of Representatives Shuhei Kishimoto questioned Prime Minister Shinzo Abe regarding the fiscal policy speech made by Minister of Finance Taro Aso. Kishimoto criticized the flexible public finance policy being promoted by the Abe administration as a license to accept any and all budget requests. He also strongly criticized the supplementary budget for fiscal 2013, stating, “The supplementary budget is being allocated for a number of projects that were rejected under the DPJ administrations. It seems that time and again the Government has firm project costs in mind before it proposes its budget. Furthermore, the budget will primarily be financed with debt and the Government is dumping that burden on future generations.”
In response, PM Abe admitted the need for deliberations to achieve fiscal soundness, stating that “As you indicated, the issuance of national bonds will place a burden on future generations. We cannot rely on fiscal action forever. We must develop and implement a growth plan that continuously promotes private investment and consumption, and find a way to achieve both fiscal soundness and economic recovery in Japan.” Regarding the cost-effectiveness of the projects listed on the supplementary budget, PM Abe merely commented that, “Although it is difficult to project the cost-effectiveness of each project, we have preferentially allocated the budget to the projects considered to be the highest performing.”
While Kishimoto thought highly of the fact that the Government had concluded a joint statement between the Government and the Bank of Japan (BOJ) on overcoming deflation and achieving sustainable economic growth, he also pointed out the following: (1) the Government should not undermine the functional independence of the BOJ; (2) Coming up with an exit strategy for the monetary policies will be quite difficult because if it looks likely that the inflation target will be reached, the BOJ will have trouble ensuring that inflation does not exceed two percent.
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