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On March 25, the main budget for fiscal 2010 and related legislation was submitted to the plenary session of the House of Councillors and approved by a majority vote.
In contrast with the budgets of previous administrations, this budget emphasizes the philosophy of “from concrete to people”, and will dramatically increase social security and education related funding through measures such as the introduction of a child allowance, making high school tuition free, and tackling the problem of missing pension records, as well as greatly reducing the funding allocated to public works projects such as dams.
DPJ Diet member Tatsuo Hirano made a speech in favour of the legislation, in which he made the following four main points: 1) this budget will enact a shift to implement the Manifesto that the DPJ submitted to the Japanese people in last year’s historic general election, in which the first change of government through the ballot box under the current Japanese Constitution was achieved; 2) bold budgetary funding allocation has been undertaken, with funds allocated in accordance with policy priorities, so that cuts were made in funding for public works projects, while funding for social security related matters was greatly increased, thereby dramatically altering the allocation of funds that had previously been determined; 3) during the budget compilation, a comprehensive reorganization of the budget took place through the budgetary review undertaken by the Government Revitalization Unit and the like, and the necessary funding to implement new projects was obtained under the leadership of politicians; 4) with proposed spending amounting to 92 trillion yen, this is the largest budget on record, but considering that the Japanese economy is still suffering the efforts of the worldwide depression that occurred following the Lehman Shock, this is an appropriate amount.
Hirano went on to say that the gap between the tax revenues that form the basis of government revenue and government spending is increasing year on year. He emphasized that it was the responsibility of politicians to avoid a situation in which the reliance on government bond, in particular deficit-financing bonds, as a main source of revenue remains unchanged, thereby making public finances unsustainable. He also stressed that the basis for limiting spending was not so much simply the elimination of wasteful budgetary spending, but rather determining the priority order of projects, and then making the difficult political decision of cutting funding even for projects for which it had been deemed necessary.
Hirano went on to say that in order to prevent confidence in the Japanese economy from being shaken, “We must demonstrate a strong political will to show that we will definitely put a stop to the deterioration in public finances, as well as exhibiting a concrete direction that is capable of gaining the approval of the markets. Furthermore, we must gain the understanding of the people by explaining things to them carefully, and be ready to engage in the reconstruction [of public finances]. We must choose our moment, and shift to the implementation of bold and unwavering reconstruction policies.” He ended his speech by saying “We need to accept the fact that it is only our DPJ-centred caucus [in the House of Councillors] and the Hatoyama administration that can implement such measures and produce results.”
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