Fiscal expansion? Our tax worrisome movesSep 9 at 11:17
"Matter Request" and "Correction Turn". It's a word we've heard lately in budgeting in countries where our tax dollars are spent. It has been pointed out that these two factors are the factors that Japan's fiscal policy continues to expand. At the end of August, the budget request was closed, and the budget compilation work for the next fiscal year began. What is happening now in the budgeting of Japan, which is considered to be the worst fiscal situation in developed countries?
(Taichi Yokoyama, Reporter in charge of the Ministry of Finance, Ministry of Economic Affairs)
A series of "item requests"
Summer is a time of "start" for the bureaucrats of Kasumigaseki to realize the policies they are aiming for.
This is because the budget request for the next fiscal year is due at the end of August.
Each ministry submits to the Ministry of Finance the content of the policy and the required amount as a set.
Towards the end of the year, intense negotiations will be held with the Ministry of Finance on the necessity of policies and the amount of budgets.
Therefore, when I read the materials submitted by each ministry and agency, I found some statements that "it will be considered in the budget compilation process as a 'request for matters.'"
Some items do not indicate not only the required budget amount, but also the details of the policy.
▽Project to support small and medium-sized enterprises working to improve productivity amid soaring prices (Ministry of Economy, Trade and Industry)▽Expenses for strengthening food security (Ministry of Agriculture, Forestry and Fisheries)▽Cost of renovating facilities so that the Self-Defense Forces can use airports and ports in case of an emergency (Ministry of Land, Infrastructure, Transport and Tourism)
"Item-request" is a method of requesting expenses without indicating a specific amount when it is difficult to estimate expenses at this time.
It is easy to reflect the latest developments and respond to political discussions when necessary.
However, the principle is to specify the content of the policy and the budget, which is an exceptional request.
This time, this was recognized in a wide range of fields, including measures to address the declining birthrate and soaring prices.
The total amount of estimated requests that closed at the end of August exceeded 8 trillion yen in the general account, the largest ever.
However, the large number of these requirements could further expand the reality.
The sealing has become a skeleton!?
Approximate requests are a procedure for collecting requests from ministries, but they have important financial functions.
Ryoji Fujii, a professor at Hakuoh University's Faculty of Law who has worked for more than 30 years as a staff member of the Budget Committee of the House of Councillors, cites "ceilinging" as its function.
Ceiling is a word that means "ceiling" in English.
It is a function that sets an upper limit on the amount requested by each ministry and agency, just like a ceiling.
Every year around July, the government establishes the "Approximate Request Standard."
This standard sets the maximum amount of a request based on the previous year's budget amount.
This is because, with limited revenues, it is necessary to prioritize policies from the request stage.
According to Professor Fujii, this system began with a rough estimate request in Showa 7, when the amount of requests from various ministries and agencies increased rapidly during the period of high economic growth.
It is said that the basic skeleton has been passed down for more than 60 years.
Throughout its history, it has also set strict caps to prevent budget inflation.
In the 50s of the Showa era, the growth rate of requests of each ministry and agency was reduced to zero, and in the first half of the Heisei era, an upper limit was set for each item, such as "10% reduction in public investment".
Words such as "zero sealing" and "minus sealing" were also used.
However, this time, since the requirements for matters were granted as a measure against the declining birthrate and soaring prices, there were many requests for matters.
As a result, Professor Fujii points out that the sealing function for approximate requirements has become obsolete.
Professor Ryoji Fujii, Faculty of Law, Hakuoh University:
"If you use expressions such as 'measures to address the declining birthrate' or 'measures to address soaring prices,' you can almost stick to them and demand anything.
Matters Requirements, the history of which is ...
When did the requirement for matters that should have been an exception appear?
When Professor Fujii examined past approximate requests, he found that the phrase "to be decided in the year-end budget compilation process" as used this time first appeared more than 30 years ago in the first year of the Heisei era.
At that time, it is said that the scope was limited, such as ▽ the amount paid by the government in employment insurance and ▽ related to the US military base in Okinawa.
However, in the Heisei 20s, the target expanded significantly.
Under the Democratic Party of Japan administration, the items listed in the manifesto were considered in the budget compilation process, and items such as the increase in child allowance were requested.
In addition, in the approximate request for FY26, which is ahead of the consumption tax increase, "social security expenses associated with the consumption tax hike" and "measures to mitigate the impact of the increase", and in FY28, "measures to realize the active participation of all citizens" were "considered in the budget compilation process".
In addition, last year, a wide range of requests were made for defense-related budgets to fundamentally strengthen defense capabilities.
Professor Fujii raises the question of whether it is time to stop and think about the requirements for matters.
Professor Ryoji Fujii, Faculty of Law, Hakuoh University:
"Isn't it basic to limit requests to items for which budget expenditure and the scale of the budget are not really decided?"
Expanding "correction turn"
As the demand for items gradually expands, it is said that the subsequent budget assessment is also being affected.
Professor Fujii analyzed the materials submitted to the Diet by various ministries and agencies for the past three years.
As a result, it became clear that some of the projects requested for items were not allocated in the budget for the following fiscal year, but in a way that was brought forward to the supplementary budget for that year.
For example, last summer's estimate request submitted for the budget for this fiscal year and FY Reiwa 5.
At least 34 of these requests were included in the second supplementary budget of the previous fiscal year, which was enacted in December last year.
The supplementary budget is organized around projects that are difficult to predict in advance and have a high degree of urgency.
Typical examples include disaster countermeasures and responses to infectious diseases such as coronavirus.
However, according to Professor Fujii's analysis, among the 12 projects, there were a number of projects that made us doubt their urgency.
▽Rocket development support project (Ministry of Education, Culture, Sports, Science and Technology: 188.78 billion yen) ▽High-speed toll discount project for the spread of ETC (Ministry of Land, Infrastructure, Transport and Tourism: 442.<> billion yen) ▽Subsidy for the development of waste treatment facilities in local governments (Ministry of the Environment: <>.<> billion yen)
When compiling a supplementary budget, it is not common to go through a procedure such as a request for estimates.
For this reason, the maximum amount for each business is not clear in the first place.
In addition, in recent years, the budget has tended to swell in the name of measures against the new coronavirus.
The second supplementary budget was an extraordinary amount of 2.28 trillion yen in the general account.
Professor Fujii says that there is something worrisome behind the expansion of the supplementary budget.
It is a word used by bureaucrats called "correction turning."
Professor Ryoji Fujii, Faculty of Law, Hakuoh University:
"'Supplementary circulation' is a word that refers to projects that are requested for the next fiscal year's budget, but are actually recorded in the autumn with the fact that the supplementary budget will be prepared as well. I think there are many things that are incorporated into the supplementary budget."
Can it be thorough? Strict assessment
"Correction turn" to "Matter request".
What does the Ministry of Finance think?
At a press conference on January 1 after the deadline for the request for estimates, Finance Minister Suzuki emphasized that he has no intention of cutting corners in the assessment, even if it is a request for matters.
Minister of Finance Suzuki
: "It is inevitable that a certain level of demand for matters will occur, but the final form of the budget will be determined after a rigorous assessment by the Ministry of Finance, including the requirements for matters."
On the other hand, a senior official of the Ministry of Finance honestly said, "It is not easy to prioritize a business that does not have a specified amount by comparing it with other businesses."
The fiscal balance of Japan has exceeded 1000,<> trillion yen, which is said to be the worst level among advanced economies for a long time.
The government has clearly stated in this fiscal year's "Basic Policy" that it will return the expenditure structure that has been inflated by the coronavirus countermeasures to normal times.
On the other hand, in response to soaring prices, there is currently a trend to formulate economic measures and formulate supplementary budgets.
In the supplementary budget, which will be compiled this autumn, how will the requirements of each ministry and agency be handled?
Won't this go against fiscal consolidation?
As a reporter in charge of the Ministry of Finance, I feel that it is necessary to keep an eye on the report.
Taichi
Yokoyama, a reporter from the Ministry of Economic Affairs, joined the Toyama Bureau in 2013 and Takamatsu Bureau,
and then covered the tax system last year as the person in charge of the
Ministry of
Finance.