Prime Minister Abe is intended to amend the Constitution during his tenure and advances his policy to strengthen Japan as ‘a powerful nation’, watching China carefully which develops rapidly. His tactic is to maintain his deceptive economic policy, the so-called Abenomics package, to win people’s support for his government. The draft budget for the Fiscal 2015 is complied pursuant to his objectives.


POWERFUL NATION AT SACRIFICE OF PEOPLE


The total sum counting 96.3420 trillion Yen for the General Account is the record-biggest as an initial compilation of budget. Combined with the sum of the supplementary budget for the Fiscal 2014, the total exceeds 100 trillion Yen, which is of the consecutive third year record. The budget implies aggressive investment efforts to overcome the declining economy.


Increased Consumption Tax Actually Supports State’s Finance


Revenue from the consumption tax, which is the biggest tax source, expands this year to 17.1120 trillion Yen, with growth by 1.7730 trillion Yen in comparison with that of the previous year as the rate is set as 8%. An increase is expected for revenue from the corporate tax and income tax, too, but either of these two, respectively, does not go beyond revenue from the consumption tax. That means the tax mechanism has relied on sacrifice of people for years.


Look at tax revenue. The budget is characterized by boosting ‘financial reconstruction’ but it just pretends on the surface. A prerequisite for the increase in corporate tax and income tax collection depends on growth by 2.7%, but international institutions anticipate a lower rate on Japan’s economy. The government allocates approximately 5 trillion Yen for a category of other sources of revenue. The so-called hidden fund has been almost exhausted. The sum of newly-issued bonds counts 36.9 trillion Yen and the total sum of the bonds, including refunding bonds, reaches 170 trillion Yen. A goal of financial reconstruction is far away.


Investment for ‘Strong Economy’


‘A strong economy is a source of Japan’s national power’ - this is a rule for the budget compilation.


The budgeting is the same as usual; investment in the public works is the focus of financial efforts, including that for developing local economies. The concept is to boost economy.


Typical is a fund for construction of the super-express railway Shinkansen to encourage local economies; it counts 75.5 billion Yen. As for Shinkansens in the Hokkaido and Hokuriku regions, another 3.5 billion Yen was added so that train service might start ahead of the schedule for a certain section of the track.


In the name of ‘intensifying international competitiveness’ a budget counting 237.9 billion Yen is allocated for an effective distribution network.


As for innovation in science & technology, 24.9 billion Yen is arranged in the draft budget. One of the new plans is to build an innovation hub for joint research by the business, academic sector and government. The government proposes to introduce ‘a flexible salary and personnel system for researchers’. But if the government uses and then throws away easily human resources, outcomes will be poor.


Government Clings to ‘Powerful Nation’


Simultaneously the government is attached to an idea of powerful nation.


A budget for the entire national defense is 4.9801 trillion Yen, which is the highest as the total exceeds 5 trillion Yen, if included is the supplementary budget. The sum links with the bills relevant to enhancing military capabilities. The government is planned to purchase sophisticated expensive weapon systems like P1 anti-submarine patrol aircraft and E2D airborne early-warning systems and prepare budgets for space and cyber sectors.


As for the global diplomacy of the Abe government, a big money is furnished: to reinforce research institutes abroad to study Japanese affairs, to construct six new embassies and to provide education programs to develop human resources for better understanding and affiliating to the nation. The Ministry of Foreign Affairs will increase budgets for ODA, or official development aid.


Poverty and Inequality Prevail


Meanwhile, budgets for social services increases by 1 trillion and 3 billion Yen, with natural increases incorporated minimally.


A decrease is made in the salary for care-takers of the elderly by 2.27%, which affects on working conditions of care workers. Though prices go up, a price-sliding pension scheme will be abolished from April. An average householder who has worked for 40 years will decrease his/her pension by 3,400 Yen a month. With cheap Yen appreciation in the exchange market, people face poverty and inequality in the assets and incomes.


Let’s oppose the draft budget for Fiscal 2015. Let’s stage actions to break through an illusion of the Abenomics economic policy.


January 27, 2015