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On February 9, in the Committee on Budget in the House of Representatives, the interpellatory session for the budget for fiscal 2012 got underway in the presence of Prime Minister Noda and the entire cabinet, with DPJ Policy Research Committee Chair Seiji Maehara serving as the party’s top batter.
At the start of his speech, Maehara referred to Noda’s designation of the reconstruction of those regions affected by the Great East Japan Earthquake as the most significant issue currently facing the administration. He expressed the opinion that the speedy disposal of disaster debris would lead to progress in reconstruction, and asked what measures the administration planned to take in this regard. Minister of Environment Hosono said that it would be necessary to undertake disposal of debris over a wider area and commented on the publication of radiation levels contained in disaster debris that would be necessary to promote this, saying, “From the perspective of fairness and alleviation of anxiety we are considering a plan that would involve a framework in which citizens and other groups, not local authorities would be able to take direct measurements.”
Maehara also asked whether the joint announcement made on February 8 by the Japanese and US governments regarding realignment of US forces in Japan would involve changes to the roadmap based on the Japan-US agreement drawn up in May 2006. In response, Minister of Foreign Affairs Gemba said, “We are making adjustments to the current plan, without changing the basic composition [of the agreement].”
Asked for his opinion on the current level of the exchange rate in relation to the strong yen and anti-deflation measures, Prime Minister Noda answered, “Since last summer the basic tendency toward the strong yen is creating the risk that the performance of the Japanese economy will be worse than expected.”
Maehara commented that measures to deal with the appreciation of the yen such as assistance for small and medium-sized businesses and a system of location incentives were nothing more than palliative care, and stressed that measure that deal with the root causes were needed. After pointing out that financing provided by the Japan Bank for International Cooperation and the like, which is funded from the Foreign Exchange Fund Special Account, is not actively progressing, he suggested that pension funds should be utilized, in order to raise the percentage of overseas shareholding and bonds held.
Maehara also suggested that in order to achieve the targets of average nominal economic growth of 3% and real growth of 2% by 2020 set by the DPJ administration, it would be advisable to sign a policy accord with the Bank of Japan. The Prime Minister emphasized his intention of making every effort to pass the budget as soon as possible, saying, “We must accelerate the process of working to reverse the current state of the nominal and real [growth rates] so that we have a nominal growth rate of 3% and real growth rate of 2%. In this context, the 2012 budget proposal places the focus on growth areas in the form of a framework that emphasizes Japan’s rebirth.” With regard to liaison with the BoJ, he said, “Some argue that it would be beneficial to sign a policy agreement, but at the very least it is essential that get down face to face, with the concerned Cabinet ministers and the Bank Governor engaging in close communication. I would like us to engage in mutual cooperation in which we engage in thorough sharing of our awareness of issues.”
Since social security related funding makes up more than half of the policy-related budget allocation in the general account budget, Maehara called for concrete action toward increasing the effectiveness of social security in the medical and welfare sectors. Minister of Health, Labour and Welfare Komiyama responded, “Half of welfare spending consists of healthcare fees, and so we would like to work toward making these more reasonable and effective by introducing electronic receipts to rationalize [the system] and encouraging the spread of generic drugs.”
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