Lower House Budget Committee: Unrestrained Fiscal Stimulus Is Unacceptable

Editorial

14:30 JST, November 8, 2025

Concerns have been growing that the approach of “responsible and proactive public finances” advocated by the new Cabinet might actually lead to a disregard for fiscal discipline. It must be said that these concerns are now becoming a reality.

Interpellations have begun at the House of Representatives Budget Committee, focusing on such matters as the economic and fiscal policies of the administration of Prime Minister Sanae Takaichi.

Takaichi explained that the “responsible and proactive public finances” approach means the stimulation of economic growth through strategic fiscal spending. She also emphasized that achieving growth would enable a reduction in the ratio of outstanding government debt to GDP.

The prime minister went on to say that the administration will withdraw the fiscal soundness goal of achieving a primary balance surplus for central and local governments “at the earliest possible time” in fiscal 2025 or fiscal 2026.

The primary balance is an indicator showing the amount of policy spending that can be covered by tax revenues and other means without relying on borrowing. The government revised the goal of achieving a primary balance surplus in the “Basic Policy on Economic and Fiscal Management and Reform” formulated in June.

The prime minister said that going forward, “we will assess the primary balance over multiple fiscal years, rather than just individual fiscal years,” but did not elaborate.

It is understandable that bold growth strategies and economic policies are needed to break the current economic stagnation.

However, achieving a primary balance surplus has long been a key goal for the government. If it is to be withdrawn, the government should present an alternative path to steadily reduce debt. Unrestrained fiscal stimulus would undermine confidence in government bonds.

Regarding the withdrawal of the surplus target, the Constitutional Democratic Party of Japan’s Satoshi Honjo was critical, saying, “Responsible and proactive public finances will become an irresponsible and lax fiscal policy.”

That said, the CDPJ’s economic policy also lack soundness. Honjo has demanded that the prime minister eliminate consumption tax on food items, based on the CDPJ’s campaign pledge.

The consumption tax is a vital source of revenue supporting social security. Simply cutting taxes just to address the current elevated prices is unthinkable. The CDPJ’s stance appears nothing more than a short-term popularity ploy.

Countermeasures against fake information were also a point of contention in the Budget Committee. Masaaki Taira of the Liberal Democratic Party warned that foreign elements could be spreading fake information on social media, potentially influencing election results at both national and local levels, and demanded the government take action.

Takaichi acknowledged that “Japan lags behind other countries,” and expressed her intention to establish a system for quickly detecting fake information and disseminating accurate information.

The European Union has implemented strict legal regulations, including obligating social media platform operators to prevent the spread of fake information. Japan must not stand idly by.

(From The Yomiuri Shimbun, November 8, 2025)