Restoring fiscal health
Japan's fiscal condition is very severe, and it is imperative to turn the primary balance into surplus by 2020. To restore fiscal health, it is necessary to take a three-pillar approach of (1) departure from deflation and realization of economic revival, (2) spending reform, and (3) revenue reform.
In particular, it is essential to make full efforts to achieve economic growth and expand tax revenue as well as steadily implement the consumption tax increase to 10% in April 2017. At the same time, measures toward spending reform, especially in terms of streamlining and appropriation of social security expenditures, are required.
As for the consumption tax, rather than thinking about further increase of the tax rate to more than 10% at this point, we understand that concentrated endeavor toward restoring fiscal health will be carried out, and then additional action will be determined based on the result of an interim assessment in 2018.
The security environment surrounding Japan is changing drastically. Since protecting citizens' lives and property is the most important responsibility of the nation, it is necessary to ensure the completion of security-related legislation. Also, it is important to thoroughly deliberate the bills at the Diet, and explain the contents carefully to the citizens so that they will have a better understanding.