Carefully examine how to best use budget funds for next fiscal year

Despite spending a huge amount of funds primarily on measures to deal with the novel coronavirus pandemic, it is hard to say that sufficient results have been achieved. There must be a thorough examination of how to effectively use the budget.

The government has approved at a Cabinet meeting guidelines for budgetary requests that are to be used as a framework for the fiscal 2022 budget. Based on the guidelines, each ministry and agency will submit requests by the end of August, and budget compilation will begin in earnest toward the end of the year.

This time, a special quota has been established to focus funds on growth areas such as decarbonization and digitization.

As it did last year with coronavirus control measures, the government is allowing ministries and agencies to make budgetary requests without specifying definite numerical amounts, requiring them only to write down separate areas of expenditure on the grounds that it is difficult to foresee the necessary amounts. For the ninth consecutive year, the government did not set a cap on overall spending.

Concerns remain that the budget will swell, partly because it could include the rehashing of existing projects in the guise of important policies.

The budget for fiscal 2020, during which the coronavirus pandemic became a serious problem, expanded by ¥73 trillion from the initial budget to an unprecedented ¥175.7 trillion in total, because the government compiled three supplementary budgets. For fiscal 2021 as well, the initial budget has already exceeded ¥106 trillion.

Responding to the coronavirus crisis is an urgent task, so greater spending is unavoidable in some respects. The problem is whether the budget has been used effectively.

In addition to the renewed rise in infections, securing a sufficient number of hospital beds has been difficult and the medical care system remains in a fragile state. There are also not enough public health center staff to cope with the number of infected people.

Inconsistencies in the government’s support for businesses and others in need have been increasingly notable. Economic revitalization minister Yasutoshi Nishimura tried to pressure eating and drinking establishments that are defying requests to stop serving alcohol to customers, via financial institutions and liquor distributors that have dealings with them. However, he was forced to withdraw this idea due to opposition mainly from related industry organizations.

The government’s support payments to eating and drinking establishments that are cooperating with its requests not to serve alcohol are said to be delayed. Under these circumstances, it is natural for businesses to become more and more distrustful of the government’s attempts to pressure them.

Of the budget for fiscal 2020 that the government has compiled, about ¥30 trillion is said to have been carried over to the current fiscal year. In fact, the budget seems to have increased as a result of prioritizing the scale of the budgetary framework, but funds have not been delivered where they are really needed.

It is widely believed that a large-scale supplementary budget will be compiled with an eye on the House of Representatives election to be held by autumn. Unless there is an examination of how appropriately past budgets have been implemented, no benefits can be expected.

A clear strategy must be worked out for the fiscal 2022 budget to identify current problems and how to improve them, including measures to promote decarbonization and digitization, and specific steps must be implemented based on that strategy. Through the budget, the government should present the public with a full, easy-to-understand picture of its policies.

— The original Japanese article appeared in The Yomiuri Shimbun on July 15, 2021.