Budget and economic reality
(From The Japan Times Oct. 9 issue)

景気の現状に見合う補正予算の扱いを

The government has suspended disbursement of some ¥2.5 trillion from the fiscal 2009 supplementary budget as it prepares to compile the fiscal 2010 budget. The government originally aimed to save ¥3 trillion and use that money as part of some ¥7.1 trillion needed to implement election promises for fiscal 2010, such as child-rearing allowances, free public high school tuition and the abolition of surcharges on road-related taxes.

Even if the government secures the ¥3 trillion, it needs to obtain a further ¥4.1 trillion by axing wasteful and non-essential projects that might have been included in the fiscal 2010 budget, and by using surpluses in special accounts.

A big problem is that the government does not have much time left. Under normal circumstances, the work of compiling the fiscal 2010 budget should be in full swing by now, with completion by year-end. The government is using a method not typically used by past administrations, which may require a longer time.

The projected savings include ¥455.2 billion (27.7 percent) of the ¥1.643 trillion allocated to public-works projects, ¥920.4 billion from special funds that the previous administration established for projects spanning two or more years, ¥476.3 billion from the farm ministry's budget, and ¥435.9 billion from the labor and welfare ministry.

Mr. Yoshito Sengoku, minister in charge of administrative reform, says the government's cull of projects will have a neutral effect on the economy, but will it? The government must not risk sending the economy — which has yet to get back on a recovery path — into a second serious dip just to fulfill election promises.

Because of poor corporate performance, tax revenue in fiscal 2009 is expected to drop to around ¥40 trillion from the previously forecast ¥46 trillion. Social welfare costs increase by ¥1 trillion each year. The government should not hesitate to reconsider its plan to abolish road-related tax surcharges and make expressways toll-free.

来年度予算編成にあたり、今年度補正予算のうち2.5兆円の執行停止が決まった。当初の目標額は3兆円で、子ども手当、公立高校授業料無償化やガソリン税などの暫定税率廃止を含む公約実施に必要な7.1兆円にあてる予定だった。

最大の問題は日程が厳しいことだ。通常なら2010年度予算編成は現時点で本格化し、年内に編成されるが、過去の政権とは異なる方法をとっているため時間がかかりそうだ。

執行停止は公共事業関係費4552億円、複数年度にわたる政策費用を用意した基金事業9204億円、農水省4763億円、厚労省4359億円を含む。

政府は公約を果たすために、さらなる景気悪化を招いてはならない。

企業業績の悪化で今年度の税収は4.6兆円を下回る約4兆円と予測され、社会福祉費は毎年1兆円ずつ増えている。政府は暫定税率廃止や高速道路無料化といった計画を見直すべきだ。