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On March 7, deliberations on the government budget for fiscal 2013 began in the Budget Committee of the House of Representatives. President Banri Kaieda was the first to question the budget on behalf of the Democratic Party of Japan (DPJ). Kaieda raised a number of topics and asked Prime Minister Shinzo Abe for his views regarding such issues as: (1) The budget of the administration of the Liberal Democratic Party of Japan (LDP) which reverts back to prioritizing public works projects, (2) The massive wasteful spending and the passing on of debt resulting from public works projects, (3) The inhibition of reconstruction projects due to excessive public works projects, (4) Setbacks in the measures for bringing the nuclear power station accident under control, (5) The nuclear and energy policy which maintains the status quo for the next decade, and (6) The economic policy which neglects the revival of a large middle class.
Kaieda began by comparing the budgets of the DPJ and LDP administrations, focusing on the proportion of the budget spent on public works projects and education, science and technology. Whereas the DPJ administration reversed the trend of the Aso Cabinet of giving a larger appropriation to public works projects, the Abe Cabinet gave nearly equal appropriations to public works projects and education, science and technology. Using a chart, Kaieda showed that in the 15-month budget, which includes the fiscal 2012 supplementary budget, public works projects were once again given a larger appropriation. Kaieda criticized the Abe administration for “reverting back to former practices.” PM Abe refuted this and stated that the reason for the larger appropriation afforded to public works projects was due to the inclusion of disaster management and other measures. Kaieda responded that one-fourth of the disaster management-related projects were measures for coping with aging buildings and that the remainder were other new projects. In particular, as projects funded by the supplementary budget must commence during this fiscal year, Kaieda stated, “The Government will have to go ahead not with the projects that are truly needed but with projects that are feasible to implement. This will result in massive wasteful spending. Construction bonds have a 60-year maturity. Does this not mean that significant cost is being passed onto future generations?” PM Abe was asked to explain his views but did not answer the question, stating that “a dynamic fiscal policy was adopted.”
Regarding the price escalation of construction materials needed for the reconstruction from the Great East Japan Earthquake as well as worker shortages caused by the excessive increase in public works spending, PM Abe stated, “To make cement, the cement making facility has to be within a 90-minute zone, making cement production difficult. The LDP-New Komeito administration has many professionals. Therefore, once the problem is known, we can take the necessary steps to move forward.” Kaieda offered the reminder that, “The results will surely reveal whether the excessive spending increase across Japan was a setback or not. The building of one large plant for fresh concrete will not be sufficient. Much effort needs to go into the promotion of restoration and reconstruction measures.”
Regarding measures for responding to the nuclear accident, Kaieda criticized the Abe administration for leaving it up to Tokyo Electric Power Company (TEPCO) to deal with, for example, the contaminated water that continues to accumulate daily, while on the other hand pledging that “the Government will lead the effort” towards the decommissioning of Fukushima Daiichi Nuclear Power Station. Kaieda stated, “What the Fukushima people are concerned about is the groundwater. Rather than leaving it entirely up to TEPCO, the Government must step forward and take response measures. The Government has to do this.”
With regard to economic and fiscal policy, Kaieda asked why, in contrast to the inauguration speech and the State of the Union address of President Barack Obama of the United States in which the President stated that the growth of a thriving middle class is the aim of a strong economy, PM Abe did not touch on the middle class at all in his policy speeches in January or in February. PM Abe responded, “The nature of our countries is different” and “I don’t think the middle class has thinned out that much in Japan.” Kaieda noted, “Partisanship has no place in this issue. The causes of the current Japanese deflation and the demise of the middle class are in fact closely interrelated. Unless this is understood, the correct economic policy cannot be taken to overcome deflation.” PM Abe refuted, “Politics is about delivering results. Regrettably, the DPJ administration was in power for three years and could not deliver. We have been in power for two months, and things are beginning to change. If you let us do more, things will change dramatically.” Kaieda noted, “It is better that you not mistake stock prices and exchange rates for results. This is the market and not the actual economy.” “Do not make it sound as though results have been delivered when they still have not. The most important thing is whether worker wages rise or not.”
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