- On February 19, the House of Representatives (Lower House) adopted the FY1999 government budget by a majority vote including the Liberal Democratic Party (LDP), the Liberal Party (LP) and others groupings. Also passed tax reduction-related bills with a majority vote of the LDP, LP and the New Komeito, sending both to the House of Councillors.
Japan's economic society is in a "a crisis of livelihood," unable to climb out of the long recession. The primary objectives of the fiscal 1999 budget should be to realize an economic recovery as soon as possible and thus help to stabilize the lives of the people. Though it is a large budget, with ¥9 trillion in tax cuts and ¥10 trillion in public works outlays, the FY1999 budget still falls short, in both quality and quantity, of what is needed to overcome the recession caused by stagnant consumption. The budget needs to be drastically restructured.
- RENGO has strongly called for the inclusion of the following specific measures in the FY1999 budget: (1) tax cuts/provisions of 10 trillion yen that benefit not only high-income earners but also people in low- and middle-income brackets; (2) consolidated taxation and a taxpayer number system to ensure transparency and fairness in taxation; (3) the formulation of specific measures to create one million jobs, and the prompt and steady implementation of such measures, as well as enhanced support for the unemployed, such as a uniform 90-day extension of jobless benefit payments; (4) the concentration of public works projects on social capital designed to improve living conditions, as well as the introduction of a system to evaluate the merits of public works; and (5) an increase, up to 50%, of the ratio of treasury defrayal to basic pension funding, the maintenance of real-term levels of pension benefits, enhanced preparations for the planned introduction of the public nursing-care insurance scheme, and drastic reforms of the medical insurance system, all with the aim of an early economic recovery and creating a sense of security regarding everyday life. RENGO has explained these requests to the government as well as to the Democratic Party of Japan (DPJ), the New Komeito, the Social Democratic Party (SDP) and the LP, calling on them to realize these policies in the FY1999 budget.
- During the budget debate in the Lower House Budget Committee, opposition parties grilled the government and sought its response on following matters. They were tax reductions benefiting middle-income people, the creation of benefits and allowances for children, a hike in the national treasury's share in basic pension funding, strengthened steps to ease banks' tight lending attitudes, the separation of fiscal policy authority and financial administration, and the dire financial state of local governments. The DPJ, New Komeito and SDP each submitted budget recomposition proposals, pressing the government to modify its budget plan.
During the discussions on these matters, the LDP and the New Komeito hammered out agreements to seek a fair and equitable tax system. It was including consolidated taxation of interest income and capital gains, in the next drastic overhaul of Japan's tax system and to start a study on the creation of new allowances for children. Under the FY1999 budget, however, nothing has been done to rectify such problems as the effective tax increase for people with annual income of ¥7.93 million or less, or to implement drastic reforms of the public pension and medical insurance systems. The budget does not include measures to correct the present unfair tax regime, through such means as a consolidated taxation system.
With regard to the employment situation, at the fourth tripartite meeting among the government, labor and management on employment measures, RENGO urged the government to set an explicit target for the number of new jobs to be created under the budgets of each government ministry and agency. What is needed now is to clearly and definitely pronounces a specific numerical target. However, the government and the Ministry of Labor failed to make any commitment, going no further than the vague parliamentary remarks made by Prime Minister Keizo Obuchi.
- Japan's crisis of livelihood is deepening, with the unemployment rate remaining at postwar high and personal bankruptcies surging. The situation calls for an early economic recovery and measures to promote employment. The government budget adopted by the Lower House, however, fails to meet the ardent expectations of the Japanese people. RENGO, in close collaboration with the DPJ and other opposition parties, will strive by all means to improve people's livelihood and employment conditions through a recovery of the Japanese economy as well as reforms of pensions and other social security systems, in a way that can help raise a sense of security about the future. RENGO will make all-out efforts toward strengthening measures for job security and an economic recovery in the course of the budget deliberations in the Upper House.
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