Election pledges presented by seven major political parties show that the ruling and opposition blocs differ markedly on fiscal policies, the taxation system and ways to finance social security schemes.
According to pledges announced by the seven parties by Monday, the three ruling parties said they will continue to follow an active spending policy to boost the economy — despite mounting deficits — while four opposition parties attacked the policy as a “tactic to win votes” in the June 25 House of Representatives election.
The ruling Liberal Democratic Party, New Komeito and the New Conservative Party have compiled their proposals on how a 500 billion yen provisional public works spending reserve for fiscal 2000 should be used. The reserve is set aside in the record-high 84.99 trillion yen budget for the year that began April 1.
In contrast, the Democratic Party of Japan, the Liberal Party and the Japanese Communist Party called for a departure from public works and balancing pump-priming measures by restoring the government’s fiscal position.
The DPJ promised to work out plans to rebuild state finances, while the JCP pledged to halve public works projects and the Liberal Party vowed to reduce government spending by more than 15 trillion yen through administrative reform.
The main opposition DPJ proposed lowering the minimum income-tax threshold in order to increase government tax receipts, an idea criticized by LDP policy chief Shizuka Kamei who said it would increase the tax burden on the weak in society.
The opposition camp failed to act in concert on the issue, as the JCP and the Social Democratic Party also opposed the DPJ’s proposal.
On financing increasing social security costs such as pensions, medical expenditures and nursing care insurance in an aging society, the New Conservative Party and Liberal Party suggested using consumption tax revenues as a fund for social security schemes, while the SDP also called for financing medical costs for the elderly with tax revenues.
The JCP called for providing pensions to recipients by using a reserve fund and reducing premiums.
The LDP remained silent on this issue, but the opposition parties insisted that securing social security funds is crucial as personal consumption has not shown an increase due to people’s concerns about future social security.
New Komeito and the Liberal Party also presented ideas to promote Internet usage, while the DPJ proposed reorganizing the current prefectural system to create larger provinces and the LDP suggested continuation of the housing loan rate cut.