This fiscal year the government is expected to collect about 5.78 trillion yen in revenues from six different taxes paid by automobile and road users. Because these revenues are legally earmarked for road improvement, however, the government cannot use the money for other purposes. This rigidity has become a major roadblock in state finance.
Prime Minister Junichiro Koizumi recently instructed that the tax revenues in question should be lumped together with general-account revenues. This would mean a greater pool of tax revenues from which the government could flexibly draw, and possibly less reliance on the issuance of government bonds to make up for tax revenue shortfalls. But the government must make sensible use of the newly available revenues to win the understanding of taxpayers who own motor vehicles and use the roads as well as the general public.
Mr. Koizumi's decision amounts to a frontal attack on the group of "road tribe" politicians -- lawmakers who have served as lobbyists for road-related construction industries. They have wielded strong influence on how revenues from the six taxes are used. For many years, these tax revenues have been regarded as a kind of "sanctuary" for road tribe politicians, most of whom belong to the ruling Liberal Democratic Party. The tax revenues have often provided "pork barrel" funding for construction industries, which then have funneled part of the money back to lawmakers as political contributions. This mechanism has resulted in the construction of highways whose economic feasibility was questionable, to say the least.