The new vice finance minister indicated Friday that the government will continue trimming spending and curbing the issuance of state bonds to reduce the balance of government debt, which has swelled to 483 trillion yen.
Koichi Hosokawa, who assumed the top bureaucratic post at the Finance Ministry the same day, did not rule out the possibility of raising the consumption tax from the current 5 percent to improve the nation’s finances.
“The situation surrounding Japan’s fiscal condition is the worst, if you look at it internationally,” Hosokawa said, noting that the debt represents more than 90 percent of Japan’s gross domestic product.
“I think we are in a critical situation as to whether Japan can afford to let its debt-ridden finances continue,” he said.
Hosokawa, a former director general of the ministry’s Budget Bureau, said the ministry will make efforts to have the primary balance show a surplus in the next decade, where tax revenues would exceed government spending, excluding debt-servicing costs.
Although he did not specify how to achieve the target except by cutting spending, Hosokawa expressed a willingness to spur public debate about ways to reform the nation’s tax system, including a possible increase in the consumption tax.
Gomi plans upgrades
New Financial Services Agency Commissioner Hirofumi Gomi pledged Friday to make the nation’s financial system more stable and fair to better serve customers.
“We need a financial system customers can use with a sense of security. And we also need to make the system vigorous and fair,” Gomi said in his first news conference as commissioner of the state financial regulator.
Gomi assumed the post earlier in the day, replacing Shokichi Takagi, who has been appointed as an adviser to the FSA. Takagi will also become deputy head of the office in charge of privatizing Japan’s postal services.
The new FSA commissioner said he will try to promote deregulation in the financial sector so that more groups and financial products can gain access to the the market and boost competition.