Taking a strong stance on fiscal discipline to deal with the snowballing national debt, newly appointed Finance Minister Yoshihiko Noda said Wednesday the issuance of new Japanese government bonds for fiscal 2011 should be kept below this fiscal year’s ¥44.3 trillion.
In a group interview at the ministry, Noda also hinted the government may propose a consumption tax hike before the next Lower House poll, which must be held by fall 2013.
Stressing that recklessly issuing JGBs should be avoided, he said: “I think ¥44.3 trillion could be the target.
“Government bonds have basically been sold in the domestic market, so there is some sense of stability, but the amount of public debt is really severe. . . . Japan must manage its finances with a sense of urgency,” he said.
The public debt has climbed to some 180 percent of gross domestic product.
Asked what he thinks of a consumption tax hike, Noda said there should be active discussions.
He said the DPJ won last year’s Lower House election with a promise not to raise the tax for four years, but the party didn’t rule out discussions for beyond that time frame.
“Depending on the outcome of the discussions, it is one thing to present it to the people in a general election.”
Noda added that not only the consumption tax should be up for reform, but other revenue sources, including the corporate tax, should be scrutinized.
He said the cap on budget requests by ministries may be revived this summer.
Last year, when the DPJ-led government abolished the cap, the ministries sought a record-breaking ¥95 trillion. The actual fiscal 2010 budget was also the biggest ever, weighing in at ¥92.3 trillion.
During his inaugural news conference as finance minister earlier in the day, Noda said some painful budget cuts may be in the offing.
“Cutting wasteful spending is a matter of course. In addition, because we have limited financial sources, it is possible that we will cut budgets for some necessary things,” Noda said, without specifically identifying what these “necessary things” are.