06/11/2012 Wrong policies bring down the weak  

Pocket

‘The state cannot function without people’s trust in the government.’ Confucius said. I am afraid that is the case in Japan, as politics is carried out without any sound policies or rational explanations and only with ad-hoc and stopgap measures at the last minute.
56.8% of the people are against the consumption tax increase and 56.3% are against the re-activation of nuclear power plants, according to the public opinion polls conducted by Kyodo News at the end of May. The opinion polls by other national newspapers show similar results, although they see the necessity for the consumption tax increase and the inevitability of reactivating nuclear power plants in their editorial comments.
People make an honest living, working diligently, and study hard in every nook and cranny of Japan. Are their opinions immature? No, definitely not. People in Japan are smart constituents who would not give more allowance to their kids just because they ask for more, without making an effort to learn at school.
For instance, when it comes to the proposed consumption tax hike, I have been proposing tax reform repeatedly during the party representative’s questions in the plenary sessions as well as in this newspaper column. We need to introduce an “Invoice” system of commercial documents to record the amount of consumption tax in order to prevent absurd unfairness. The current consumption tax reporting system creates unfair profit and loss and tends to protect the strong and to bring down the weak. Another absolute unfairness in the current tax system is the fact that 70% of the incorporated companies and 66% of the mega corporations adopting consolidated accounting pay no corporate income tax or corporate enterprise tax. In order to prevent this absurdity, we need to deploy a tax system based on the size of the spending but not the profit, known as “tax based on business size.”
The government and the ruling DPJ are now trying to pass legislature for a consumption tax increase instead of carrying out comprehensive tax reform. They are offering a remedy to maintain a consumption tax rate of 5% on items such as food. They are dodging the issues and the remedy is just an act to show they meant well. We also have to remind ourselves that if particular industry groups or related government agencies make a decision on which items the government will raise the consumption tax for, it would be a revival of the anachronistic discretionary administration.
As for power generation, all the polls clearly indicate the public opinion is to reduce the dependency on nuclear power. However, one year has passed since the March 11th triple disaster and the government has yet to show any detailed plans to improve the safety of the nation’s 54 nuclear reactors including those at the Fukushima Daiichi nuclear power plant which had a meltdown or to reduce the dependency on nuclear power for electricity generation. Instead, the government keeps threatening the nation that the Japanese economy and people’s living will collapse unless the nuclear power plants are reactivated. It is a disgraceful behavior by the government. They are acting like a child who has not done homework until the last day of summer vacation and now is asking parents for help. The attitude is that they don’t have to act until there is a crisis.
The government now promotes disposing of the debris from the earthquake and tsunami outside the disaster zone. The clearing up work is so behind that it makes me laugh. We finished cleaning up 20 million tons of the debris from of the Great Hanshin Earthquake by the end of the second year after the disaster which means it only took one year to clean up everything. The amount of the debris left by the Great East Japan Earthquake was less and yet only 10% of it has been disposed of, after one year.
This government should be ashamed of its management failure. Instead it calls for coming together as a nation to share 20% of the rubble clean up. However, there is no schedule shown for the remaining 70% on site and the government seems to have no plan at all. Then, such call is like putting the cart before the horse. The comprehensive emergency business plan for TEPCO, where the government will inject one trillion yen in taxpayers’ money and hold the majority of voting rights, is a nightmare of a socialist planned economy. The temporary nationalization protects the value of the bank-owned debt, increases the posts for retired government bureaucrats, and creates a moral hazard of forcing the burden on taxpayers. The government should change its policy and learn from the break-up of Japanese National Railways and its privatization. It should split up TEPCO into a liquidated company responsible for compensating the victims and a new company “Kanto Electric Power” responsible for supplying electricity. It’s belated, but it’s better late than never.
However, we only hear proposals for “separation of electricity generation and transmission” in order to lower the cost for free competition, to strengthen the safety, and to improve services. But such proposals are in pursuit of profit-making only and lack in rationality.” We need to keep in mind such wrong policies would cause tragic “unplanned power outages” like those in California and create such company like Enron, an energy IT firm, run under the concept of market fundamentalism which caused it to go bankrupt in the year 2001.