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Fujii promises to compile 2010 budget on time, overhaul or no

by Takahiro Fukada

New Finance Minister Hirohisa Fujii promised Friday that the government will compile the fiscal 2010 budget by the end of the year like it does every year, and that its framework will be decided by early next month.

Since the Democratic Party of Japan plans to fundamentally overhaul the structure of the national budget, which has been designed for decades by governments led by the Liberal Democratic Party, many in political and business circles are concerned the budget process for next year may be delayed.

Fujii’s remark was apparently aimed at easing such concerns.

“I would like to compile (the budget) within this year,” Fujii said during an interview at the ministry.

Fujii hinted that the new framework will set aside the previous one designed by the LDP-led administration of former Prime Minister Taro Aso and reflect policies agreed to by the ruling coalition and the DPJ.

Fujii, 77, worked at the Finance Ministry for 21 years before entering politics, serving as finance minister in two administrations in the early 1990s.

He said the government will be able to secure the funding to support the DPJ’s policy pledges, including the child-care allowance, free high school tuition, and the elimination of expressway tolls.

“It’s all right,” Fujii said of the funding doubts. “If we cannot do this, there is no need for regime change.”

Fujii said the steps will help the economy.

“We will have to allocate resources to things that are directly linked to people’s lives,” he said.

Touching on the government’s economic stimulus plans, Fujii hinted that he will wait another month or two before gauging the consumption situation and the regional economy.

As for the budget, Fujii said the National Strategy Bureau, a new policymaking body to be set up under the prime minister, will be charged with drafting the blueprint.

When it comes to handling down-to-earth matters on compiling the budget, however, Fujii emphasized that it will be his ministry that has the power to make the final call.

“Logically speaking, the power apparently belongs to the Finance Ministry,” Fujii said, adding that the strategy bureau is more like an organization that designs plans to address long-term issues, such as how to repair Japan’s battered state coffers.

But Fujii also said the government will place priority on improving people’s lives before overhauling its finances.

“It is impossible for us to make finances healthy while sacrificing people’s lives,” he said.

As for the Finance Ministry’s relationship with the Bank of Japan, Fujii said the DPJ should respect the central bank’s independence. In the LDP days, the government often tried to bully the central bank on monetary policy.

Touching on Japan’s plan to reduce carbon-dioxide emissions, Fujii withheld comment on a recent remark made by Environment Minister Sakihito Ozawa, who reportedly said he hopes to levy a carbon tax on fossil-fuel use next April.

Fujii said the carbon tax issue should be studied further in light of the present business environment.