As Japan’s fiscally conservative finance minister, Yoshihiko Noda long sounded the alarm on the nation’s ballooning government debt. It is more than twice the size of its $5 trillion economy — and rated more risky than that of Italy and Spain.
Now, after Mr. Noda was elected Japan’s prime minister this week in response to the nation’s natural and nuclear disasters, the question is whether he can administer his prescription: raise taxes while reining in spending.
“We will no longer spend wastefully as if we are pouring buckets of water into a sieve,” Mr. Noda declared in a speech on Monday just before Japan’s ruling Democratic Party elevated him to the top job.
Read the rest of the story: Japan Seeks Answers to Debt Load Without Angering Voters.
Japan must devise a concrete plan for tax reform to avoid deepening the nation’s massive debt and the loss of confidence in the economy, the new fiscal policy minister said on Wednesday.
The comments from Kaoru Yosano come as Prime Minster Naoto Kan faces what analysts say is a make or break battle over the issue, which has proved divisive with voters.
‘If we keep going with no fiscal discipline, allowing the stock of public debt to grow larger or continuing to borrow more than we receive in tax revenue, international confidence in Japan could be gradually eroded,’ Yosano told reporters.
‘Both the fiscal authorities and the Bank of Japan must pay adequate attention to that point in managing economic and fiscal policy,’ he said.
Yosano was speaking as Kan’s new-look government on Wednesday took its first steps toward formulating a tax-hike proposal and seeking talks with the private sector.
On Friday the premier appointed the 72-year-old conservative former finance minister and fiscal hawk Yosano as his new fiscal policy minister, also putting him in charge of tax and social welfare.
Read the rest of the story: Confidence in Japan lost without reforms.