Original Title: A record-breaking US$1 trillion budget, Japan’s economy “fight”
Source: Beijing Commercial Daily
Under the deteriorating epidemic trend, Japan has to suspend several subsidies to promote consumption. Of course, the economic recovery will be stagnant. This is a helpless but must face reality. In this situation, vigorously stimulating the economy has become the only option for the Japanese government. The large annual budget has been approved. The next step is to see how much vitality this can inject into the economy.
The largest annual budget in history has finally been finalized, and Japan can “spend money” with peace of mind. On December 21, the Japanese government convened a cabinet meeting to finalize the 2021 budget, totaling 106.6097 trillion yen (approximately US$1.03 trillion), which is not only a 4% increase from this year’s budget level, but also a record for nine consecutive years. The highest record in history.
Many of these expenditure items hit new highs. For example, the general expenditure of 66.9 trillion yen includes approximately 35.8 trillion yen for social security and 23.8 trillion yen for debt service, and 16 trillion yen for transfer payments to regional and local governments. Social security Expenditure set a new record for the most; and defense expenditure was 5.3422 trillion yen, exceeding 5 trillion yen for six consecutive years, increasing for nine consecutive years and reaching a new high.
In addition, in response to the new crown epidemic, the budget has added a new preparation fee for epidemic response, amounting to 5 trillion yen.
In terms of income, specific items include: 57.5 trillion yen in tax revenue, 43.6 trillion yen in bond issuance income, and 5.6 trillion yen in income from other sources. The Japanese government plans to issue bonds worth 236 trillion yen in the next fiscal year, the highest level since the global financial crisis. The ratio of debt income to total income will rise from 31.7% in fiscal 2020 to 40.9%.
According to the arrangement, the budget will be submitted to the regular Congress next year for consideration. After successfully passed by Congress, the budget will be implemented in April 2021 from the new government’s fiscal year. At the same time, the draft budget was proposed together with the additional budget for the third quarter of this year, and became a 15-month consolidated budget.
It is worth mentioning that part of the funds in Japan’s third round of economic stimulus plan will be provided by this budget. On December 8 this year, the Japanese government’s interim cabinet meeting passed the third large-scale economic stimulus plan, with a total scale of 73.6 trillion yen and fiscal expenditures of 40 trillion yen. Prior to April and May, the Japanese government has launched two large-scale economic stimulus plans, with a total scale of more than 230 trillion yen.
Regarding the higher budget, Li Jiacheng, an associate professor at the School of International Relations of Liaoning University, analyzed that on the one hand, after the epidemic in Japan spreads again, subsidies for epidemic prevention and enterprises affected by the epidemic need to increase; on the other hand, the Tokyo Olympic Games postponement this year also needs to increase Budget, Osaka also needs a budget to prepare for the World Expo.
At present, Japan’s deficit and debt problems have reached unprecedented levels. According to data from the Ministry of Finance of Japan, in the fiscal year 2021-2022, excluding new bond issuance and debt repayment, the Japanese government budget deficit is expected to be as high as 20.4 trillion yen, more than twice the initial forecast this year. At present, Japan’s public debt level is as high as 5 trillion US dollars, which is more than twice the total economic scale.
Li Jiacheng said frankly that Japan’s expansionary budget may bury hidden dangers in the future. After all, the increased fiscal deficit will weigh heavily on the follow-up, which is definitely not conducive to healthy economic development in the long run. However, compared with the future, many urgent tasks need to be solved by Japanese Prime Minister Yoshihide Suga. For this reason, this kind of overdraft model has to be adopted.
After the cabinet meeting on the 21st, Japanese Finance Minister Taro Aso said frankly that the Japanese government must maintain a proper balance between preventing infection, maintaining economic growth and achieving fiscal reforms. “This is the most difficult task in this budget.”
As he said, Japan is currently facing a series of problems such as worsening of the epidemic situation and economic stagnation. As of 12:40 on the 21st local time, the cumulative number of confirmed cases of the new crown in Japan has exceeded 200,000. On October 29, Japan had a total of more than 100,000 confirmed cases, and it took only 53 days to reach the second “100,000 cases”.
For this reason, Japan also had to suspend its tourism subsidy policy. Yoshihide Suga announced on the 14th that he will suspend the travel subsidy policy aimed at encouraging consumption nationwide from 28th of this month to 11th January next year to curb the spread of the new crown epidemic. Earlier in late November, Sapporo City in Hokkaido and Osaka City in Osaka Prefecture, where the epidemic was severe, had been removed from the subsidy list.
Even so, many Japanese people still believe that the execution of the new government is insufficient. According to the poll conducted by Japan’s “Asahi Shimbun” from December 19th to 20th, the approval rate of Yoshihide Suga and his cabinet has fallen sharply to 39%, a sharp drop of 17 percentage points from the 56% in November; no support The rate rose from 20% in November to 35%.
Dissatisfaction is mainly concentrated in the prevention and control of the epidemic. 56% of the respondents believe that the government has not done a good job in the prevention and control of the new crown epidemic, which is a significant increase from 40% in November. 70% of the respondents believe that Yoshihide Suga “no Give full play to leadership in the COVID-19 pandemic; 79% of the respondents believe that the time to suspend travel subsidies is “too late”.
The promotion of consumption has been forced to suspend, so the remaining hope of the Japanese economy is the budget plan, which may also be the reason for increasing stimulus under the pressure of the deficit. The data shows that the economic outlook index of Japan’s economic observers in November was only 36.5. Both compared with the previous value of 49.1 or the expected 47.9, there was a sharp decline.
Beijing Commercial Daily reporter Tao Feng Tang Yitian
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