Finance Ministry must screen large budget requests for needless bloat

The Yomiuri Shimbun

12:18 JST, September 1, 2021

Ballooning expenditures alone cannot give the public a sense of reassurance. The government should compile an effective budget to help revitalize the Japanese economy, while taking all possible measures to deal with the novel coronavirus pandemic.

The deadline for budgetary requests from each ministry and agency for fiscal 2022 has passed. The total amount requested reportedly exceeds ¥111 trillion, marking a record high for the fourth consecutive year.

The request for social security costs including medical expenses is ¥31.8 trillion, up by about ¥670 billion from the initial budget for fiscal 2021, as the baby boom generation will begin to turn 75 or older in 2022.

With the surge in the issuance of government bonds due to supplementary budgets compiled three times in fiscal 2020 to deal with coronavirus infection control measures, redemption and interest payments on government bonds are set to grow by 27% to ¥30.2 trillion. This is also one of the main factors that increased the overall budgetary requests.

It is inevitable that fiscal spending will increase to some extent in response to the spread of coronavirus infections.

For coronavirus control measures, there have been noticeable cases in the requests this time, just as last year, in which ministries and agencies made rough budgetary requests without defined amounts, only writing down separate areas of expenditure, on the grounds that it is difficult to foresee how much will be necessary. There is the possibility that the actual amounts will further increase during the budget compilation process.

The increase in social security costs is expected to continue. The government should be aware of its fiscal situation, which is the worst among developed countries, and make every possible effort to improve the efficiency of the budget. To achieve this, it is essential to determine the effects of individual projects.

Over the past 1½ years, the government has spent a huge amount of money, including supplementary budgets, on such measures as strengthening the medical care system to deal with the coronavirus pandemic. However, the issues of hospital beds for COVID-19 patients remaining tight and a shortage of nurses have not been resolved. Looking at this point alone, it is obvious that the budget cannot be said to have been effectively used.

In future budget compilations, it will be important to present specific challenges and solutions. The government must present measures to ensure the establishment of temporary facilities with hospital beds and the recruitment of medical workers, among others, and draw up a road map toward containing the pandemic.

Attention should also be paid to a growth strategy to shore up the Japanese economy. In the budget requests, a special quota has been established to focus funds on growth areas such as decarbonization and digitization.

The Land, Infrastructure, Transport and Tourism Ministry asked for ¥6.9 trillion, up 18% from the initial budget for fiscal 2021, for purposes including making homes energy-efficient and constructing and improving ports where large parts for offshore wind power installations are stored and assembled.

The Economy, Trade and Industry Ministry and the Agriculture, Forestry and Fisheries Ministry significantly increased their budgetary requests from the previous fiscal year, with priority measures such as the promotion of renewable energy and the support for environmentally friendly organic farming, respectively.

Regarding priority areas, a rehash of existing projects in the name of signature policies and an overlap of similar projects can easily be included in budgetary requests. The Finance Ministry must closely scrutinize the content of the requests.

— The original Japanese article appeared in The Yomiuri Shimbun on Sept. 1, 2021.