CDP Exec Raps Govt for Dropping 1-Year Primary Surplus Target

Tokyo, Nov. 10 (Jiji Press)–The main opposition Constitutional Democratic Party of Japan’s policy chief Satoshi Honjo has criticized Prime Minister Sanae Takaichi’s plan to scrap the government’s policy of designating a specific target fiscal year for turning around the country’s primary budget balance to a surplus. The prime minister’s plan to assess whether a primary budget surplus at the central and local governments has been achieved in time spans of several years is “very problematic,” Honjo said in a televised debate on public broadcaster NHK, or Japan Broadcasting Corp., on Sunday. Takaichi declared her intention to drop single-year primary surplus targets at a meeting of the Budget Committee in the House of Representatives, the lower chamber of the Diet, or parliament, on Friday. Achieving single-year primary surpluses is “a milestone on the road to fiscal consolidation,” the CDP policy chief argued. Honjo also slammed Takaichi’s proposed “responsible and proactive” fiscal policy, saying, ” Given the current inflation, a large fiscal stimulus would cause prices to rise further and accelerate the depreciation of the yen.” Takayuki Kobayashi, Honjo’s counterpart in the ruling Liberal Democratic Party, emphasized “the need to think flexibly instead of excessively sticking to single-year primary budget balances.” “Strategic fiscal spending will boost the Japanese economy,” he went on. Other debate participants also called on the government to weigh fiscal discipline so as not to lose market confidence. “We need the market’s understanding,” policy head Alex Saito of Nippon Ishin no Kai (Japan Innovation Party), the new coalition partner of the LDP, said. “We will review unnecessary spending from scratch.” Mitsunari Okamoto, policy head of Komeito, the former partner of the LDP, said, “An aggressive fiscal policy tends to weaken the yen.” Meanwhile, the opposition Democratic Party for the People’s policy chief Makoto Hamaguchi argued for supporting growth areas with active fiscal spending, claiming: “Economic growth will naturally increase tax revenues. It is extremely important to create a virtuous cycle.” END [Copyright The Jiji Press, Ltd.]