TOKYO - Prime Minister Kan Naoto in his first policy speech on June 13 stated that his new Cabinet will "bring about a ‘strong economy,' ‘robust public finances' and a ‘strong social security system' in an integrated manner."
We now see both Japan's economy and national finances in a weak condition, and the general public has the earnest desire to have the government strengthen them.
In the economy, public finances and social security, the LDP (Liberal Democratic Party)-Komei governments kept giving out wrong "prescriptions," which made conditions increasingly worse. What the new government should do now is, therefore, to provide new prescriptions and get rid of the cause of the disease that seriously damaged our country in these areas.
‘A third way'
In the policy speech, Kan emphasized he will pursue a "third way" that he said is different from the political direction of previous governments. However, when he talks about a "strong economy," "robust public finances" and a "strong social security," it is only a higher consumption tax rate and lower corporate taxes that the Prime Minister is attempting to achieve. This clearly indicates that the new DPJ (Democratic Party of Japan)-led government will keep the same course as that the previous DPJ-led government and the former LDP-Komei governments took.
In fact, while describing their "growth strategy" at a press conference on June 9, Naoshima Masayuki, minister of economy, trade and industry, said, "The corporate tax rate needs to be lowered about 15 percent. To begin with, we will reduce it by five percent in the next fiscal year." Hosono Goshi, acting secretary general of the DPJ, on June 11 also announced the party will include "cutting corporate taxes" as one of its campaign promises for the upcoming House of Councilors election. In addition, Finance Minister Noda Yoshihiko on June 8 explained that the Prime Minister's pledge for a "drastic reform of the country's tax system" "will obviously be applied to the consumption tax."
According to the policy speech, the government will pursue a growth strategy by curbing wasteful expenditures and stabilizing social services through a sound national finance resulting from tax system reform with the result of promising relief to those in need.
This scenario, however, seems to be a "pie in the sky." On the Futenma base issue for the U.S. forces, the government will increase the huge enormous military budget to construct a large military base at Henoko in Nago City at the U.S. request instead of reducing the military budget. Far from correcting excessive tax breaks for large corporations and the very rich, the government is planning a further tax cut for large corporations. The government is going to increase wasteful spending, and no sound finance and elimination of wastes are possible unless the military budget and tax cuts for large corporations and the rich are redressed.
The substance of the DPJ "growth strategy" looks just like that of the Liberal Democratic-Komei government: increasing the gap between the extremely rich and the rest of society.
The pension system that the DPJ is proposing as part of social services reform is thinly disguised a mechanism to shift the cost of pension premiums borne by large corporations to the general public by increasing the consumption tax rate. The government is going to maintain the discriminatory medical service system for elderly people aged 75 and over for another three years, thus breaking the DPJ public promise to abolish the discriminatory system. What is worse, the government is going to lower the age of applicability to 65, thus expanding the scope of the system. It is the quickest way to increase social unrest, not relief.
On June 8, soon after the new DPJ leadership was established, Secretary General Edano Yukio and acting Secretary General Hosono Goshi paid a courtesy visit to the Japan Business Federation (Nippon Keidanren). Hosono stated that the DPJ is preparing a growth strategy in accordance with the demands of Nippon Keidanren.
Party that can speak for people against business circles
If "strong economy, national finance, and social services" mean a strong and reliable government representing the interests of business circles and large corporations, nothing good can be expected for the general public.
The DPJ government, just as the LDP-Komei government, gives priority to the interests of business circles and large corporations over the concerns of people's living conditions.
The key to defend people's livelihoods and gain a sound economic recovery is installing a government that can stand up to the self-centered interests of the United States and the Japanese business circles.
Reposted from Japan Press Service.
Photo: Japanese Prime Minister Naoto Kan speaks during a press conference in Tokyo, June 21. (AP/Shizuo Kambayashi)