Public Policy Planning & Consulting Co. (SEISAKU-KOUBOU) is a public policy consulting firm based in Tokyo, covering broad policy areas such as economic policy, fiscal policy, regulatory policy, administrative reform, international trade and investment, etc.
PPPC provides consulting and briefing services to the clients in the central/local governments, Diet, local assemblies and the private sector.

This blog is aimed at providing general information, latest updates and some of our analytical reports about Japan's public policy in English.
The contents include;
- updates on some important government councils, especially those in which our executive officers serve as the members,
- weekly reports on latest news in Nagata-cho, the political center in Japan, (partially).
- analytical reports and articles by our members and distinguished experts outside the firm,(partially).


This Week’s “Nagata-cho” (17-25.Dec, 2013)

 The Cabinet on December 24 approved the draft budget for the next
fiscal year. The total of general account amounted to all time record
of 95.88 trillion yen (3.5% increase from this year). Combined with
the supplementary budget decided in early-December, the size of
expenditure will exceed some 101 trillion yen. The government will
simultaneously implement the initial FY 2014 budget and the
supplementary budget for this year to avoid possible negative impacts
of the consumption tax hike to 8% scheduled in April 2014.
 In terms of revenue, it calculates the additional income by the
consumption tax hike (4.53 trillion yen), as well as the increases in
corporate tax and income tax caused by the recovery of export
companies to be +16% from this year (50 trillion yen), thereby reduced
new issuance of government bonds to 41.25 trillion yen (-3.7%). The
rate of bond-dependency, rate of loans among the overall income, thus
improved to 43% from 46.3%.

 The policy-related budget amounted to 72.61 trillion (+3.2%), making
deficits of the basic primary balance approximately 18 trillion yen, a
5.2 trillion minus of this years 23.2 trillion yen. The numbers show
that the government target of 4 trillion yen reduction set in the
midterm fiscal plan in August and Basic Principles for FY 2014 Budget
Formulation decided on Dec 12 was accomplished.
 The largest appropriation item is social security costs, amounting to
30.51 trillion yen (+4.8%). It was caused by the natural increases of
medical insurance and pension accompanying ageing, as well as
expansion on child-rearing support measures part of which will be
covered by revenue from the consumption tax hike. Also, it allocated
larger amounts of budget on public works projects including disaster
measures and infrastructure (5.96 trillion yen, +12.9%), defense
expenses including countermeasures to Chinas aggression over sea and
North Koreas missile issues (4.88 trillion yen, +2.8%), promotion of
science and technology (5.96 trillion yen, +1.4%), all exceeding this
years budget.
 On the other hand, the local subsidy decreased to 16.14 trillion yen
(-1.5%) in eye of automatic benefits from the consumption tax hike.
The expenses used for repayment of the national bonds amounted to
23.27 trillion yen (+4.6%).

 As policy measure to boost the countrys competitiveness, the budget
appropriated 120 billion yen for research and development, including
establishment of a Japanese version of National Institute of Health as
control tower of leading-edge medical care studies. In the field of
agriculture, it created 80 billion yen by halving the direct
compensation payment to rice farmers (15,000 per 10 are) to cover
costs for establishment of a Farmland Consolidation Bank which is to
consolidate abandoned farmland and manage leasing business to
ambitious farmers.
 The budget also added 0.25 trillion yen for decommissioning nuclear
reactors (-48%), 0.13 trillion yen for disposing of contaminated
materials (+37%), 22.5 billion yen of compensation and cleaning
projects, and other research and development or human resources
training projects.

 The focal point in the budget formulation process was how to achieve
the economic recovery to overcome deflation while at the same time
approaching to fiscal soundness by reducing wasteful spending. The
background of the ever-largest budget this time was combination of
ending of the special measures to cut down the national government
employees salary by 7.8% in total, transfer of part of special
accounts to the general account (0.79 trillion yen), and temporary
measures to lessen burden on elderlys medical fees (0.41 trillion
yen). Yet, there were scenes that the relevant ministry, LDPs policy
tribes and industry worked together to pressure the government for
budget allocations which in turn turned down efforts to reduce appropriations.


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