Dispute dates back to 2003
Written by Writer on Tuesday, October 21st, 2008
Dispute dates back to 2003
Hiroshi Arimitsu / Yomiuri Shimbun Staff Writer
(Oct. 21, 2008)
The wrangling over the use of the reserves and surpluses in the special accounts was initially triggered in February 2003 by a remark made in the Diet by then Finance Minister Masajuro Shiokawa.
In reference to the general account’s snowballing deficits, Shiokawa sounded the alarm about special-account expenditures, likening the former to parents and the special accounts to children.
“While the parents are narrowly managing to stave off hunger with rice porridge, children in the outbuilding are feasting on sukiyaki,” he said.
His remark was meant to convey that despite efforts being stepped up to reduce spending from the general account aimed at rebuilding deficit-ridden government finances, efforts for thrift were badly lacking with regard to the special accounts.
A policy to consolidate and phase down the scale of the special accounts was hammered out during a December 2005 Cabinet meeting held to establish “key principles for administrative reform.”
This called for about 20 trillion yen of the reserves and surpluses in the special accounts to be used “in a way conducive to helping rehabilitate the budget deficits [in the general account],” during the five-year period starting from fiscal 2006.
In the wake of this decision, legislation was drawn up in March 2007 to slash the number of the special accounts to 17 by the end of fiscal 2011, compared with 31 in fiscal 2006. This was to be achieved by encouraging the integration and abolition of some of the special accounts.
As a result, cash amounting to about 21.8 trillion yen has been set aside from the special accounts for the national budgets for fiscal 2006 to 2008 to help lessen the outstanding balance on government bonds. Another 5.5 trillion yen from the special accounts has been transferred to the general account to be used for a range of policy purposes.
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Provenance of ‘treasure’
The term “buried treasure” began to be used around autumn 2007.
It was first used with negative implications by an LDP fiscal and administrative reform panel that favored fiscal reconstruction by means of raising taxes. The panel released an interim report in November last year titled, “On the Legend of Kasumigaseki’s Buried Treasure.”
Flatly denying the existence of such riches, the report said, “Reserves and surpluses in the special accounts are solely for purposes explicitly specified by law,” adding, “There is no room for speculation on the existence of what some refer to as Kasumigaseki’s ‘buried treasure.’”
Another group of LDP lawmakers, which places priority on cutting back government spending as a means of fiscal reform, subsequently insisted that about 40 trillion yen in the special accounts could be used to cut deficits in the general account. This group is called the “rising-tide school,” a reference to a belief that the fiscal crisis can be weathered by accelerating the national economy’s growth and without the need for tax hikes.
The dispute between the two LDP groups, one stressing the necessity for tax hikes and the other upholding the rising-tide theory, continues to rage.
The current controversy over Kasumigaseki’s buried treasure is now said to be in a third phase, in which the ruling coalition parties and the opposition party are deeply involved.
