Monetary policy pertains to the regulation, availability, and cost of credit, while Fiscal policy deals with government expenditures, taxes, and debt. Through management of these areas, the
Ministry of Finance regulated the allocation of resources in the economy, affected the distribution of income and wealth among the citizenry, stabilized the level of economic activities, and promoted economic growth and welfare.
The Ministry of Finance played an important role in Japan's postwar economic growth. It advocated a "growth first" approach, with a high proportion of government spending going to capital accumulation, and minimum government spending overall, which kept both taxes and deficit spending down, making more money available for private investment. Most Japanese put money into savings accounts, mostly
postal savings
Postal savings systems provide depositors who do not have access to banks a safe and convenient method to save money. Many nations have operated banking systems involving post offices to promote saving money among the poor.
History
In 1861, ...
.
Budget process
The
Budget Bureau of the
Ministry of Finance is at the heart of the political process because it draws up the national budget each year. This responsibility makes it the ultimate focus of interest groups and of other ministries that compete for limited funds. The budgetary process generally begins soon after the start of a new
fiscal year on April 1. Ministries and government agencies prepare budget requests in consultation with the
Policy Research Council.
In the fall of each year, Budget Bureau examiners reviews these requests in great detail, while top Ministry of Finance officials work out the general contours of the new budget and the distribution of tax revenues. During the winter, after the release of the ministry's draft budget, campaigning by individual
Diet
Diet may refer to:
Food
* Diet (nutrition), the sum of the food consumed by an organism or group
* Dieting, the deliberate selection of food to control body weight or nutrient intake
** Diet food, foods that aid in creating a diet for weight loss ...
members for their constituents and different
ministries
Ministry may refer to:
Government
* Ministry (collective executive), the complete body of government ministers under the leadership of a prime minister
* Ministry (government department), a department of a government
Religion
* Christian mi ...
for revisions and supplementary allocations becomes intense. The coalition leaders and Ministry of Finance officials consult on a final draft budget, which is generally passed by the Diet in late winter.
In broad outline, the process reveals a basic characteristic of Japanese political dynamics: that despite the oft-stated ideals of "
harmony
In music, harmony is the process by which individual sounds are joined together or composed into whole units or compositions. Often, the term harmony refers to simultaneously occurring Audio frequency, frequencies, pitch (music), pitches (timb ...
" and "consensus," interests, including bureaucratic interests, are in strong competition for resources. Political leaders and Budget Bureau officials need great skill to reach mutually acceptable compromises. The image of "Japan Incorporated," in which harmony and unanimity are virtually automatic, belies the reality of intense rivalry. The late-twentieth-century system is successful insofar as political skills and appreciation of common interests minimize antagonisms and maintain a balance of power among groups. It is unclear, however, whether this system will continue as Japan faces such problems as growing social inequality and an
aging society.
National debt
In 2011 Japan's public debt was about 230 percent of its annual
gross domestic product, the largest percentage of any nation in the world.
In order to address the Japanese budget gap and growing national debt, in June 2012 the Japanese Diet passed a bill to double the national consumption tax to 10%. The new bill increases the tax to 8% by April 2014 and 10% by October 2015. However, it was delayed until at least October 2019.
[Daily Yomiuri websit]
Lower house OK's tax hike bills / 57 DPJ lawmakers rebel against vote; Ozawa 'studying various options'
Retrieved on July 4, 2012
See also
*
Defense budget of Japan
The military budget of Japan is the portion of the overall budget of Japan that is allocated for the funding of the Japanese Self-Defence Forces. This military budget finances employee salaries and training costs, the maintenance of equipment and ...
*
Ministry of Finance (Japan)
*
Bank of Japan
The is the central bank of Japan. Nussbaum, Louis Frédéric. (2005). "Nihon Ginkō" in The bank is often called for short. It has its headquarters in Chūō, Tokyo.
History
Like most modern Japanese institutions, the Bank of Japan was fo ...
References
*
Japan
External links
Bank of Japan's (BOJ) - Bank Rate since 1985 (on a monthly basis)The Japan Tax Site - Japanese fiscal policy and Japanese tax issues
{{Authority control
Politics of Japan
Finance in Japan
Fiscal policy
Japan