Despite increased spending on child care support and education, the Abe administration will never waver in its efforts to fix government finances and achieve a primary budget surplus, Finance Minister Taro Aso said Monday.
On the first day of the regular Diet session, Aso called for swift passage of the budget so the government can deploy “all policy steps” to achieve sustainable economic growth.
“We will never drop the banner of fiscal restoration and will not waver in our efforts to achieve the goal of posting a primary budget surplus,” said Aso, who is also deputy prime minister, in his policy speech to the Diet.
The government plans to secure funding for expanded child care support and free preschool education via the consumption tax increase slated for 2019.
As the initiative will reduce funds allocated for paying down government debt, Prime Minister Shinzo Abe has effectively given up on his administration’s goal of posting a surplus in the primary balance by fiscal 2020.
A primary balance deficit means the government cannot finance the annual budget, excluding debt-servicing costs, without issuing new bonds.
Japan’s fiscal health is the worst among advanced countries, prompting calls for this to be addressed amid accelerated aging of the population demographic and increased social security spending.
“It is necessary for the budget (for fiscal 2018) and related bills to clear the Diet as soon as possible to achieve both economic revitalization and fiscal reconstruction,” Aso said.
The government is seeking Diet approval of a record ¥97.71 trillion budget for fiscal 2018 and a supplementary budget for the current fiscal year through March.
The economy has been improving thanks to robust exports. The government expects growth of around 1.8 percent in real terms in fiscal 2018, according to an estimate endorsed by the Cabinet.
In a speech to lawmakers, economy minister Toshimitsu Motegi vowed to take the necessary steps in the next three years to encourage companies to raise wages and invest more.
As state minister in charge of the Trans-Pacific Partnership, Motegi said he will make every effort to get the free trade deal signed “at an early date” after 11 countries agreed on core elements of it in November.
“It’s of great significance to create free and fair rules for the 21st century sooner than anywhere else amid globally rising protectionism,” Motegi said.