Focus debate on actual use of money, rather than just OK’ing huge amounts

Diet debate encompassing a host of policy issues is taking place amid turmoil in the international situation and economic outlook. It is important for the government and the ruling and opposition parties to go beyond abstract discussions and step into substantial policies.

The House of Representatives Budget Committee has begun deliberations on the supplemental budget proposal for fiscal 2022.

Russia’s invasion of Ukraine has been protracted, and there is uncertainty over the path to economic recovery. There are not many days left in the Diet session, and the House of Councillors election will be held in July. Diet debate should thoroughly examine the issues and respond to the questions and concerns of the public.

In his response to the proposed supplementary budget totaling ¥2.7 trillion, Kenta Izumi, president of the Constitutional Democratic Party of Japan, said: “It is too little. Small economic measures cannot protect people’s livelihoods.” Prime Minister Fumio Kishida sought Izumi’s understanding by saying, “The basic idea is to be prepared for contingencies.”

The government has placed an emphasis on measures to deal with rising crude oil prices in its supplementary budget proposal. If prices continue to rise, further impact on businesses and households is inevitable. It is understandable that relevant emergency measures are being taken.

The cost of fuel, however, should not continue to be subsidized by large-scale government spending for an extended period of time. It is important for the government to clearly present its outlook for the future.

It is unusual for a ¥1.5 trillion reserve fund to account for half of the proposed budget. It is said to be intended to replenish the reserve fund of the fiscal 2022 budget that was disbursed in April.

While reserve funds can be disbursed without an authorization of the Diet and allow for flexible responses to unforeseen circumstances, such use could lead to a loosening of fiscal discipline.

Even if it is unavoidable in an emergency, it is not desirable to continue without limit this practice of appropriating huge reserve funds. The budgeting process should be seriously reviewed.

In Diet debate, Izumi emphasized the importance of protecting the livelihoods of the people by presenting a policy dubbed the “three pillars of livelihood security”: inflation control, free education and steady security measures.

With the upper house election in mind, the aim may have been to focus on certain issues, such as the hardships of daily life and uncertainty about the future, but the specifics of the proposal were unclear, and discussions could hardly be said to have been deepened.

Regarding Kishida’s pledge during the Japan-U.S. summit to secure a “substantial increase” in defense spending, Itsunori Onodera of the Liberal Democratic Party called for “making sure that the Self-Defense Forces have the appropriate defense capability to protect the country.”

Kishida merely said that “we will discuss what is necessary to protect the lives and livelihood of the people and secure the budget,” but did not say what part of the defense budget would be increased and how.

It would make more sense to accumulate necessary expenditures, such as specific equipment, rather than setting a total amount as a goal. With limited financial resources, the government must not forget to make efforts to thoroughly explain the situation to the public.

(From The Yomiuri Shimbun, May 27, 2022)