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Prime Minister Kan (from right), Secretary General Nikai, President Masatoshi Shimomura, etc.
In the third supplemental budget, the government budgeted 2.3 trillion yen for the first year of the new national resilience plan. Toshihiro Nikai, general secretary of the Liberal Democratic Party, has advanced the plan to start next year due to “continued economic measures” (Cabinet). However, in recent years, public companies have consistently become unable to exhaust their budget due to a labor shortage. With the amount of new government bonds issued topping 100 trillion yen, the need for this plan is also being questioned.
◆ National resilience plan whose need is questioned
According to the Ministry of Finance, the total amount of “unnecessary amount” that is returned to the national treasury increases year after year because the public works budget cannot be consumed within the fiscal year and is carried over to the next fiscal year. The carry-over / unused amount in fiscal 2019 was 4.1 trillion yen, double from five years ago. There are some emergency restoration works that are badly needed due to large-scale disasters, but there are many projects that have a strong sense of economic measures like this time.
Professor Takeo Doi, from Keio University, criticizes the current situation in which the budget that cannot be used is poured: “It is an abnormal situation that the extended budget runs out first.” “The amendment to the National Resilience Plan is probably the result of the resistance of the Ministry of Finance to the pressure of expansion of political spending,” he said.
◆ The budget that cannot be exhausted is poured
This plan, which spans several years with a project scale of 15 trillion yen over five years, does not fit into the supplemental budget for urgent projects. Even so, an executive from the Ministry of Finance revealed that the reason for the amendment was “in exchange for stopping the expansion of the initial budget, the supplementary budget was used as the recipient.”
In addition, there are also projects that have been registered as “political affairs” without urgency. These include the 2 trillion yen fund for the decarbonization of the Kan administration’s main policy and the related expenses of the university fund that supports university research funds. To avoid issuing new government bonds, the fund will use an unusual method of allocating a profit of around 500 billion yen from the sale of gold held by the Ministry of Finance for the casting of commemorative coins.
◆ There is little urgency and there is scale
“First of all, there was no need for a tertiary correction.” Mr. Nobuhide Kiuchi, a former member of the Bank of Japan’s deliberation committee, notes. Even if national resilience is necessary, it is not urgent. The urgent cost of the crown countermeasure (more than 4 trillion yen) can only be covered with the reserve fund of almost 7 trillion yen insured by the government.
As for the additional economic measures that were the basis of the third amendment, the ruling party has been calling for a scale to compensate for the lack of demand (34 trillion yen annually) in the period July-September of this year. Yasutoshi Nishimura, Minister of Economic Revitalization, admitted in a meeting after the cabinet decision that “the scale of 34 trillion yen was always in mind.”
As a result of the inclusion of unnecessary and urgent projects in the “scale-based” budget, the issuance of government bonds, which are debts, was the worst in history. (Tomoyuki Morimoto)
