Do the ruling and opposition parties think they can increase government debt indefinitely? We can’t shake our concern about the tone of the election campaigning. Parties are underscoring how they will increase expenditures and cut taxes, while they simply ignore the issue of securing the necessary financial resources.
Measures to address rising prices are the major point at issue in the upcoming Upper House election. The significant increase in the prices of such daily essentials as gasoline, electricity, and food is burdening household finances. Without question, taking measures to combat skyrocketing prices is a pressing issue.
But rising prices impact families and companies differently depending on their income level and industry sector, respectively. Political parties are supposed to compete with each other by presenting detailed policies able to reach people in need. However, the parties’ campaigning has the feel of a “pork-barrel battle.”
The Liberal Democratic Party (LDP) specified in its election platform that it will continue providing subsidies to oil wholesalers to address the high gasoline prices. The government introduced this measure in January. But cutting prices across the board also benefits wealthy people and profitable companies and so does not make sense.
On the other hand, the Constitutional Democratic Party of Japan (CDPJ), Nippon Ishin no Kai (Japan Innovation Party), and other opposition parties are vowing to reduce or abolish the consumption tax. That will certainly ease the burden on consumers when they purchase [goods and services], but a blanket tax reduction for the entire public is not very rational.
[Measures to tackle high prices] must also be in line with Japan’s vision for the kind of society it aims to become over the medium to long term.
Reining in gasoline princes for a long period could result in the delay of energy-saving efforts and hinder steps toward the realization of a decarbonized society. If keeping gas prices down is an emergency measure, political parties are responsible for at least presenting an exit policy as well.
The consumption tax is a basic tax whose revenues are used to cover social security costs, which are ballooning as Japan ages. Tax cuts are more difficult to terminate than subsidies. If massive tax revenues are lost, it will reinforce concerns about the sustainability of the social security system. It is unclear how political parties will achieve an economic environment in which people can make purchases and investments without worry.
In addition to measures to address the high prices, the ruling and opposition blocs are suggesting policies that will lead to increased budgetary spending. The LDP vows to significantly boost budgets for childrearing, decarbonization, and defense. The CDPJ also calls for the expansion of child benefits and the introduction of a free school-lunch program under the banner of “securing people’s livelihoods.”
We understand how important these policies are. But these are permanent policies so the political parties must show how they will secure financial resources for them over the long term. The parties, however, make little mention of the review of low-priority policies and present almost no realistic plan to raise taxes.
Financial reconstruction has been a major campaign issue in many recent national elections. It is abnormal that no major political party has put forward a concrete road map for financial reconstruction despite the fact that the coronavirus pandemic has further increased the government’s massive debt.
Uncontrolled debt is nothing other than a betrayal of the next generation. We want the political parties to keep this in mind and engage in realistic policy discussions.