EDITORIAL | Bold Economic Measures Needed to Address Soaring Prices

このページを日本語で読む

In a nutshell, the government's latest comprehensive economic measures gave priority to size over content. They were approved by the Ishiba Cabinet on November 22. Moreover, they are backed by a supplementary budget for FY2024 of about ¥13.9 trillion JPY ($91 billion USD).

Meanwhile, the scale of the measures, including private expenditures, is about ¥39 trillion ($257 billion). The figures exceed the corresponding amounts in 2023's economic measures.

In the recent Lower House election, Prime Minister Shigeru Ishiba himself called for stimulus measures surpassing those of 2023. That the substance of his fiscal policies was given little consideration at that time is clear from the final result. It is a list of retreaded, outdated policies.

Without a doubt, the currently soaring prices for various commodities and other problems should be dealt with appropriately. Bold economic measures would also be in order if deemed necessary to relieve the burden on the public. Nonetheless, questions remain about whether such a large package is really necessary given the economy's shrinking demand deficit.

Thinking Through the Budget Plan

There is little evidence that the Cabinet gave due thought to the outcomes of the proposed policies. Does the government's policy to restore its pre-COVID expenditure structure, which had ballooned due to the pandemic, mean nothing to Prime Minister Ishiba?

One wonders if the ruling minority parties are seeking to curry favor with the public by handing out money. If they think that will make up for their difficulties, they are sorely misguided.

*The chairpersons of the tax system research committees of the LDP, Komeito, and DPP discuss the tax system in the Diet on November 28. (©Sankei by Ataru Haruna)*

One of the measures to cope with rising prices is a ¥30,000 ($198) handout to low-income households that are not subject to resident taxes. The previous administration of former Prime Minister Fumio Kishida also did the same thing.

It is good to focus on low-income households. However, there are also elderly households exempt from resident taxes that possess considerable financial assets. We need to make sure we are supporting those households that truly need assistance.

Revitalization Takes a Strategy

Under the proposal, subsidies for electricity and natural gas will be resumed. Also, gasoline subsidies will continue beyond January 2025. These have been repeatedly resumed and extended and ¥11 trillion ($72.4 billion) has already been expended on them. Merely sticking with policies that have been criticized as being contrary to the nation's decarbonization and energy conservation goals will not open new prospects for the future.

*Prime Minister Shigeru Ishiba enters the Prime Minister's Office on November 28. (©Sankei by Ataru Haruna)*

Regional revitalization is a topic on which Prime Minister Ishiba places great importance. Therefore, the bill includes the creation of a "new regional economy and living environment revitalization grant." However, the situation is not so simple. Increasing subsidies to local areas alone does not guarantee the success of revitalization measures.

Regional revitalization has long been a challenge. First, we must rigorously examine issues with existing economic policies. Then, we must implement effective measures to overcome the obstacles.

Achieving a 'Growth Economy'

That holds true for the other measures as well. Without sufficient verification and assessment of the effectiveness of various policies, the government's goal of achieving a "growth-oriented economy" will also remain an impossible dream. On that point, it doesn't matter how many fiscal and tax measures are implemented.

It is also important to be aware of the need to carefully review the "¥1.03 million ($6,800 ) barrier for relief from individual income taxes to an amount up to 1.780 million ($11,700 ) as proposed by the DPP" (Democratic Party for the People). Furthermore, there are proposals under review that would cut gasoline taxes. These were also included in the economic measures agreed upon by the Liberal Democratic Party, Komeito, and the DPP. The specifics, however, were left for negotiation among the three parties in the future.

Author: Editorial Board, The Sankei Shimbun

このページを日本語で読む