Tokyo, Oct. 19 (Jiji Press)–Japanese Prime Minister Sanae Takaichi on Monday left open the possibility of issuing government bonds to fund the envisaged reduction in the consumption tax on food items, despite her previous claim that the necessary funds would be secured without relying on such bonds. “We will appropriately control the amount of government bond issuance (for the whole year). We are not ruling out bond issuance” to finance the tax cut, Takaichi said during comprehensive questioning at the Budget Committee of the Senate, the upper chamber of the Diet, Japan’s parliament. As measures to tackle rising prices, the government plans to cut the 8 pct consumption tax rate for food items to 1 pct for two years from next April and introduce an income-linked benefit program. The two steps are expected to require about 10 trillion yen in funding over the two-year period. Reiterating the government’s intention to secure financial resources for the measures through reviews of both expenditure and revenue, Takaichi said: “We will thoroughly reassess our policy priorities. This is not intended to wipe out the positive effects of tax cuts or increased spending.” At a press conference the same day, Chief Cabinet Secretary Minoru Kihara explained that Takaichi’s remark on government bond issuance “was made in the context of the overall budget formulation.” “There is no change in the government’s policy,” the top government spokesman added. During the session, Takaichi also suggested that the government plans to “enhance the credibility of the yen by building a strong economy.” “Although there has been talk of a Takaichi-induced weak yen or high interest rates, I explicitly reject such claims,” Takaichi said. On the responsible and proactive fiscal policy advocated by the Takaichi administration, Finance Minister Satsuki Katayama told the same committee meeting that the policy is “designed to achieve both a strong economy and fiscal sustainability and does not mean the government will pursue reckless fiscal measures that could undermine market confidence.” Katayama added that the government plans to implement strategic fiscal spending while examining its fiscal management from multiple perspectives. Elsewhere in the session, Daisaku Hiraki, a member of the opposition Komeito, proposed requiring records of contacts between Diet members and government ministries over budget allocations to be created and retained. The proposal came in the wake of a scandal involving former agriculture minister Kazuo Yana’s remarks on budget cuts for municipalities whose mayors did not support him in a general election. Takaichi responded, “We have no plans to consider the proposal at this time from the standpoint of ensuring appropriate and efficient administrative operations.” “I hope (Yana) will determine for himself how to fulfill his accountability and do so sincerely as a member of the Diet,” Takaichi said. END [Copyright The Jiji Press, Ltd.]
