In his policy speech Friday, Prime Minister Yoshihiko Noda listed three big issues Japan now faces — reconstructing the areas devastated by the March 11 quake and tsunami, bringing the Fukushima nuclear crisis under control and accelerating the recovery of the Japanese economy.
He said that to do these things, the Diet must pass the third supplementary budget for fiscal 2011, topping ¥12 trillion, as soon as possible. Nobody would oppose the generalities he mentioned, but the Diet and the people should carefully evaluate his policies.
Mr. Noda said that Japan will need an estimated ¥20 trillion to reconstruct the disaster-hit areas over the coming five years. The Diet must carefully review this estimate to verify its accuracy and scrutinize the supplementary budget to prevent any unwise use of public money in the reconstruction. Mr. Noda said that he will help raise funds for the extra budget by trying to increase non-tax revenues while trimming wasteful spending. But his remarks don't hide the fact that he has made up his mind to push large-scale tax increases for the sake of the reconstruction. He should pay attention to the possibility that tax increases will weaken the economy, thus lead to a decrease in tax revenues and delaying a timely resolution of the nation's financial mess. The prime minister should consider ways other than tax hikes to raise the necessary funds, including issuing bonds whose redemption period spans several decades.