Get Angry, Japanese People

—A Ten-Trillion-Yen Tax Increase, but Only Seven Trillion Yen in Government-Bond Reduction: Are We Going to Let Them Keep Making Fools of Us?—

As a result of the Liberal Democratic Party’s victory in the recent first election held under the single-member constituency system, the increase in the consumption tax to 5% has been settled. The share of medical expenses paid out of pocket is also set to rise sharply, from one-tenth to two-tenths for the insured person. Meanwhile, the special tax reduction measures are to be abolished.

These tax increases are expected to raise government revenue by ten trillion yen. Ten trillion yen may be hard to grasp, but Japan’s national budget is seventy trillion yen; the tax increase amounts to one hundred thousand yen per person, or four hundred thousand yen for a family of four.

Even in the face of such an extraordinarily high-handed tax increase—one that could easily provoke riots—the Japanese people seem completely unconcerned. It is impossible to believe that most Japanese people think this is acceptable. The reality is probably that hardly anyone recognizes what is happening.

In a sense, I believe some degree of tax increase is unavoidable for Japan, which has the worst fiscal deficit among developed countries. Canada, where I lived from the year 92 for 2 years, then had the worst accumulated deficit among developed countries. Jean Chrétien, who became prime minister in the general election held in the year 94, in September, raised taxes and overcame the situation. But his tax increase was fundamentally different from what the Japanese government is now trying to do. The distinction is captured succinctly by whether or not it implements the

1:3 rule

The 1:3 rule means that for every 1 unit of tax increases, 3 units of spending cuts are made. Applied to Japan’s current tax increase, raising taxes by ¥10 trillion would mean cutting spending by ¥30 trillion. The government would then have ¥40 trillion available to reduce the deficit. By continuing this for 3 years, the Canadian government transformed, in that brief period, the worst fiscal condition among developed countries into one regarded as the best.

Looking back at Japan, however, the budget remains as profligate as ever, with government-bond reduction amounting to a mere ¥7 trillion. This is like handing bureaucrats and special-interest politicians a magic mallet that endlessly produces money. Surely the purpose of increasing the LDP’s representation in the last general election, thereby effectively accepting an increase in the consumption tax to 5%, was not to enable this.

Japanese people are submissive to authority. But this is now an age of democracy. The Japanese people have every right to be angrier.

Let us all raise our voices now and demand:

• Strict enforcement of the 1:3 rule
• Implementation of 0-based budgeting

And if the LDP does not carry out these measures, the voters should deliver an unmistakable verdict in the next election. In Canada’s general election of the year 92, the Progressive Conservative Party, which had held a majority, was reduced to just 2 seats because it failed to fulfill its promises. A single-member constituency system makes such an outcome possible.

Of course, bringing about such a situation requires a party capable of serving as an alternative. Unfortunately, neither the New Frontier Party nor the Democratic Party, nor even the Hata New Party, has set out clear policies in this sense. These opposition parties should form shadow cabinets and present policies of this kind as quickly as possible.

A politician is not someone who panders to the people. A politician is someone who explains their ideals to the people and persuades them. Such an attitude is urgently needed now.