Govt Vows to End Crisis-Mode Spending as Pandemic Contained

Jiji Press

16:47 JST, June 8, 2023

TOKYO (Jiji Press) — The government unveiled Wednesday a plan to end its crisis-mode spending structure introduced to fight the COVID-19 pandemic and focus again on restoring fiscal health.

The government will bring spending back to normal, it said in a draft of an annual economic and fiscal policy guidelines that was presented at a meeting of Prime Minister Fumio Kishida’s Council on Economic and Fiscal Policy.

The draft said the government will work to prevent the crisis-mode spending from lasting longer than necessary or becoming the norm.

It also seeks to review local governments’ spending structures and examine the effects of state subsidies provided to help them fight the pandemic.

Kishida told the meeting that the government “will promote economic and fiscal reform steadily” under the guidelines that he said will be adopted in mid-June.

The government maintained its goal of achieving a primary budget surplus in fiscal 2025 but stopped short of including the goal in the draft guidelines.

The draft also said the government will enhance its efforts to reverse the country’s falling birthrate while describing spending on child-related policies as “the most effective investment for a bright future.”

In the draft, the government set a goal of having the country be at the core of global supply chains for strategically important goods such as next-generation semiconductors.

On rapidly evolving artificial intelligence technologies, the government said Japan will lead international discussions on risks while enhancing the country’s ability to develop generative AI tools.

The government expressed expectations for the Bank of Japan to realize 2% consumer inflation accompanied by wage growth.

The draft said the government will work to reform the labor market such as through reskilling support.

The government promised to secure safety and restore public trust in the My Number personal identification system following a series of problems. It also plans to work with the private sector to expand the use of My Number cards, according to the draft.