The Abe administration's second increase in the consumption tax rate will not stop the financial deterioration, and it will end at 20:49 on August 28.

The Abe administration raised the consumption tax rate twice, but it did not stop the deterioration of the financial situation.

According to the Cabinet Office, in fiscal 2012, when the government was established, the total amount of debt, which is the debt of both the national and local governments, was around 886.2 trillion yen.

As the population ages and social security costs, which continue to increase, cannot be covered by tax revenue alone, the government will secure financial resources for social security costs and promote financial soundness. Raised to 8%.

However, after the tax increase, personal consumption dropped and the tax rate was raised to 10% twice.

Last year, in October 2019, the tax rate for food and other items remained unchanged at 8%, and we introduced a reduced tax rate and raised it to 10%.

The tax revenue from the tax increase was used as a financial resource for free early childhood education and childcare, and the aim was to transform the social security system into an all-generation system.

On the other hand, due to the enormous amount of measures taken in preparation for the economic downturn after the tax increase, the initial budget for fiscal 2019 has expanded to a level where the general account expenditure exceeds the record high of 100 trillion yen.

In addition, in order to cope with the spread of new coronavirus infections this year, we created a supplementary budget twice and expanded the general account expenditure in fiscal 2020 to over 160 trillion yen.

As a result, the public finance will deteriorate further, and according to the Cabinet Office, the total amount of debt, which is the debt of the national and local governments combined together this year, will increase to approximately 1146 trillion yen.

This is more than double GDP = gross domestic product, and the balance is expected to increase by more than 260 trillion yen compared to the 2012 fiscal year when the government was established.

The government was aiming to make the “fundamental budget balance” profitable in fiscal 2020 by making it possible to cover the expenses necessary for the policy with tax revenues by increasing tax revenues due to economic growth and raising the consumption tax rate. But I gave up in 2018.

We have set a new target for profitability in fiscal 2025, but it is difficult to achieve that goal.

The administration has repeatedly stated that there is no fiscal consolidation without an economic revival, but the fiscal deterioration has not stopped.