TOKYO – New Japanese Finance Minister Shunichi Suzuki said Tuesday the government should draw up a road map for achieving fiscal soundness as spending to fight the coronavirus pandemic has caused the nation’s finances to deteriorate.
“To secure market confidence as well as sustainability of social security and a sufficient capability to deal with crises, I believe we need to solidify the path toward fiscal consolidation,” Suzuki told a press conference after assuming the post the previous day in Prime Minister Fumio Kishida’s Cabinet.
With the nation’s financial condition becoming “even more severe” due to the cost of responding to the pandemic, the 68-year-old minister also pledged to facilitate investment in “key areas” of focus for the new administration, such as digitalization and decarbonization.
As for Kishida’s economic stimulus plan, Suzuki said he has yet to receive any specific instructions from the prime minister, but he will promote discussions on potential steps with each ministry.
Kishida said during the campaign for the ruling Liberal Democratic Party’s presidential election that he will soon compile an economic package worth “tens of trillions of yen,” or hundreds of billion dollars, to support people and businesses reeling from the coronavirus pandemic.
Kishida also said he is considering cash handouts to “vulnerable people,” without giving details.
The upcoming economic stimulus could worsen Japan’s fiscal health that is already the worst among major developed countries, with public debt at over 1,200 trillion yen ($10.8 trillion) as of March, more than double the country’s annual gross domestic product.
Japan has retained the goal of turning its primary balance — tax revenue minus expenses other than debt-servicing costs — into the black by fiscal 2025. But its economy is set to post a primary deficit of more than 20 trillion yen under the fiscal 2021 initial budget amid the pandemic.
Suzuki succeeded Taro Aso, his brother-in-law who had served as the nation’s finance chief since December 2012 when the LDP returned to power. Aso held the post for over 3,200 days, the longest in the post-World War II era.