Tuesday, January 6, 2009

Council on Economic and Fiscal Policy

Prime Minister Taro Aso held a meeting of the Council on Economic and Fiscal Policy at the Prime Minister's Office.

At the meeting, the Council discussed the second draft of "medium- to long-term fiscal policy and an economic and fiscal outlook for next ten years (provisional)," the first draft of which was discussed on December 19 of last year.

The second draft urges the government to conduct economic and fiscal management in a decisive manner, aimed at realizing a strong and bright Japan amid the severe economic and fiscal situation, while pursuing "boldness" as the basic stance of the immediate efforts and "responsibility" as that of the medium-term efforts. In the near term, the aim is to defend the daily lives of the people from the global economic turmoil, with the top priority being reviving the economy within three years including the current fiscal year. As the medium-term efforts, the second draft calls for a solid and sustainable social security system aimed at mid-level social welfare and mid-level burden-sharing, thereby rebuilding public finances, by carrying out the "mid-term programme" to build a sustainable social security system and to secure a stable supply of financial resources for that purpose, which was decided at the Cabinet meeting on December 24 of last year. Furthermore, in the medium to long term, the objectives are to achieve economic growth through reforms, to vigorously bring about a future growth scenario, to actively promote regulatory reforms, and to develop new industries and technologies and thereby create new demand and employment.

Restoration of fiscal health will be pursued as the top priority of the economic recovery under the current nonbinding goals, from the perspective of fiscal discipline in the short run. To realize fiscal health in the medium term, the annual expenditure budget is required to achieve a well-modulated distribution of outlays, given socio-economic changes and other factors, while the existing basic direction of expenditure reform is maintained. As for the annual revenue, the second draft calls for the steady advancement of fundamental reform of the tax system, including that of the consumption tax. The second draft also proposes intensive promotion of a growth policy that foreruns the changes in global trends.

Related Link

• Council on Economic and Fiscal Policy (Cabinet Office)