In the extraordinary cabinet meeting held on June 30 an economic policy package was approved. They are the Basic Policy on Reforms of Economic and Financial Management and the new Growth Strategy (=Strategy to Revive Japan), which are characterized by big monetary cuts for social services and disastrous consequences in people’s livelihood. Meanwhile, further tax cuts in favor of Big Business and a huge increase of military budget are proposed.


PEOPLE’S LIFE IS DISPOSED AWAY DELIBERATELY


Further Reforms than Those by Koizumi Administration


The policy package represents a guideline to compiling budgets and revising taxation in light of the target of sound finance set for the Fiscal 2020. It sets forth a three-year period for intensive reform which begins in the Fiscal 2016 through 2018, during which a natural increase in the social policy costs should be restrained by an amount from 900 billion Yen to 1.5 trillion Yen. In total 300-500 billion Yen will be reduced from the budget annually.


The scale of reduction is bigger than that of the Koizumi administration, which was around 220 billion Yen a year. The Abe government will keep decreasing annually even after the Fiscals of 19 and 20 by 300-500 billion Yen.


Proposed measures include reforms in the public health system, elderly care program, pension plans and life protection service. In the medical service sector: (1) patients older than 75 years of age will pay more, (2) patients will owe more at the beginning of hospitalization, (3) removal of some treatments, like poultice, from the insurance coverage, and (4) restrictions on visits of outpatients. These steps demand people to pay bigger sums.


In the elderly care: (1) service beneficiaries will owe bigger burden, (2) exclusion of certain services for persons with light level impairment from the insurance system, and (3) premium payments will surge in the municipalities where care costs are higher. As for pensions: (1) lowering pension sums, and (2) more rigorous taxation. As for life protection service, medical benefits will be reduced.


In Favor of Big Business and Military


While making big cuts for people’s living, the policy package for growth will cut taxes further for big corporations. The corporate tax rate, in a total sum of the taxes imposed by the national and local levels, will decrease from 32.11% in the Fiscal 2015 to 31.33% in the Fiscal 2016. It plans to reduce to the 20% digit in several years and specifies ‘the target will be achieved soon’. The policy unequivocally advises to expose people to plights, while it extends prestigious treatments to big businesses.


As for taxation, the new policy recommends to increase taxes for the abandoned farmland. Foreseeing conclusion of the TPP (=Trans-Pacific Partnership) negotiation in coming months, the policy urges to ‘consolidate arable land’.


The Ministry of Agriculture, Forestry and Fisheries began a ‘farmland bank’ program in the Fiscal 2014, in which abandoned pieces of farmland is collected by the bank to lease them to farmers eager to cultivate. The initial target was achieved to an extent of roughly 20%. The government, judging from the poor results, is to introduce a new plan: to raise the tax rate on the abandoned farmland on one hand, and on the other, if a farmland owner leases plots of land to the bank, he will enjoy a reduced tax rate. Thus, by decreasing taxes, it could consolidate farmland smoothly.


However, most of the abandoned farmland is located in the deserted, semi-mountainous areas and conditions are poor. Even if the land is registered in the bank, it is extremely hard to find a farmer to rent it. The policy has little significance.


The Abe government steadily allocates more money on militarizing the nation, looking over the debts amounting to 1,053 trillion Yen, while it cuts budgets for social services and takes contradictory measures in the agricultural sector. A symbolic example is a purchase of 17 units of Osprey, aircraft proven to be defective, from the United States with the sum of 360 billion Yen. The government emphasizes ‘effective preparation of efficient defense capabilities’.


People are required to voice more loudly against the Abe government which takes polices to destroy people’s living conditions.


July 14, 2015