It is no doubt that the deteriorating economic situation will have significant influence on tax revenue. The priority is to underpin the Japanese economy with stimulus packages. It gives the Japanese government no choice but to issue deficit covering bonds in the second supplementary budget.
This, however, does not mean the fiscal policy decided in 2006 has been changed. The government should take any measure to achieve a primary balance surplus by FY 2011.
Not only houses but also automobiles and household appliances should become targets of tax cut to encourage replacement demand for energy saving products. The debate on the next year's tax reform will never end without discussing the key issue.
The measures will contribute to CO2 emission reduction in households and transportation related industry. The action will also expand domestic business demand. Economic growth and environmental conservation can live together in the policy.
Based upon the result of the last G20 in Washington DC, APEC leaders committed themselves to reach an agreement on the modalities next month. It was a good progress. They expressed their strong intention of fighting against protectionism amid the global economic slowdown. It makes us feel reassured.
The successful conclusion of the Doha Round will stimulate the global economy through expansion of trade and investment on the planet.