The Diet has started deliberations on the fiscal 2009 supplementary budget, which, with ¥14 trillion in spending, is a record economic stimulus. The government hopes that the extra budget will help pull the Japanese economy out of the recession. Since the main and supplementary budgets for fiscal 2009 are premised on the issuance of a large amount of government bonds, both the ruling and opposition camps need to carefully discuss this in the budget committees of both Diet chambers.
To finance the supplementary budget, the government will have to issue bonds worth ¥10.8 trillion. The value of bonds to cover both the main and supplementary budgets will reach a record ¥44 trillion. It is very unlikely that the government will be able to achieve the goal of producing a surplus in the primary balance of the central and local government budgets in fiscal 2011. The Democratic Party of Japan criticizes the supplementary budget as a wasteful and lax use of tax money, and says the government plans to make up the revenue deficiency by raising the consumption tax rate. As a counterproposal, the DPJ calls for spending ¥21 trillion over two years to help the Japanese economy tide over the current downturn.
The ruling and opposition blocs should carry out Diet discussions so that people can judge which bloc's proposal is effective and feasible. Careful discussions are particularly needed on a long-term strategy to put the economy on a path of growth and to improve social safety nets including medical and nursing-care services, pensions and measures for the jobless.