Public understanding of the inevitable reduction in public services that will result from the government’s drive for fiscal austerity must be won by showing a strong resolve to push forward with reform measures, Finance Minister Hiroshi Mitsuzuka said Mar. 19.

Speaking at a news conference, Mitsuzuka said lawmakers, including himself, must do some serious soul-searching over the continually demanded public-spending increases and stimulus packages financed with government bonds in recent years. The nation’s fiscal health is so poor that on Mar. 18, Prime Minister Ryutaro Hashimoto laid out five guiding reform principles — including reduced fiscal 1998 general outlays from fiscal 1997 budget levels — so the deficit stays within 3 percent of gross domestic product in fiscal 2003.

Mitsuzuka also declared that the era of big government is over, and that the public should no longer expect the central government to serve all of its needs. Discussions on specific numerical targets to reduce government spending by sector, in line with one of Hashimoto’s principles, will begin after the fiscal 1997 budget is enacted this month, Mitsuzuka said.

The finance chief added that the Fiscal Investment and Loan Program, often called the nation’s second budget, would also be closely screened along the lines of fiscal 1997 and whittled down again in fiscal 1998. He also reiterated the Cabinet’s position that there would be no tax hikes other than the two percentage point rise in the consumption tax beginning next month “for some time,” but did not give a specific time frame.

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