The Diet has passed a ¥5.465 trillion supplementary budget for fiscal 2013. This budget is problematic because it includes items that had been deemed wasteful and thus recommended for elimination from the fiscal 2014 budget.
The revival of these items is tantamount to public deception. How can people trust the government, which insists that it is serious about financial reconstruction, after this move?
The Diet spent only five days deliberating the supplementary budget, which is the main pillar of an economic package designed to combat the negative effects of the April consumption tax hike. The Finance Ministry and Diet usually just give supplementary budgets a perfunctory examination. They should discard this habit, which doesn’t serve the public interest, and carefully review them.
The supplementary budget passed the Lower House on the night of Feb. 4. The Upper House held substantive discussions on it on Feb. 5 and enacted it on Feb. 6. In the Upper House, the ruling bloc of the Liberal Democratic Party and New Komeito plus Shinto Kaikaku, a minor party, supported the budget.
The Democratic Party of Japan and other opposition parties opposed it after finding out that some ¥360 billion of ¥460 billion in projects under the jurisdiction of nine ministries and the Cabinet Office — an amount that a government conference of experts on administrative reform had recommended be excluded from the fiscal 2014 budget last fall — was revived for the fiscal 2013 supplementary budget. Some ¥300 billion are for public works projects managed by the land and infrastructure ministry. It is clear that the Abe administration shifted projects that were killed in the fiscal 2014 budget to the supplementary budget for fiscal 2013.
Prime Minister Shinzo Abe told the Diet that the supplementary budget focused on items that can create demand in the first half of fiscal 2014, which starts on April 1. Finance Minister Taro Aso said that the items revived in the supplementary budget are necessary for quickly putting the economy on a path of growth.
But such public works projects will likely serve as pork-barrel projects aimed at pleasing ruling politicians’ constituencies. With people facing increased tax burdens, social insurance premiums and medical service fees in fiscal 2014, it is extremely irresponsible for the government to waste public funds. Therefore it should freeze the implementation of nonessential and non-urgent projects.
The supplementary budget also includes ¥1.2 trillion that will be used for building up funds to be used over several years. This runs counter to the principle that a supplementary budget should only be compiled when there is an urgent need for it. Japan’s outstanding government bonds will top ¥1,000 trillion at the end of fiscal 2014. The government’s reckless attitude toward the use of public money will only delay the nation’s financial reconstruction.
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