Japan Extra Budget: Updated May 17, 2025.

Japan ruling camp to craft extra budget this fall to support economy

Article source: https://mainichi.jp/english/articles/20250513/p2g/00m/0bu/021000c

Ideas

There have been many recent supplementary budgets already to try and help the Japanese economy but with little success.

With no disrespect but it seems the Japanese government doesn't or hasn't been able to do much as inflation continues to increase and Japanese households continue to have problems with it.

And then there is the possible tariff situation which potentially could hit Japanese exporters more than Japanese households but the tariffs could cause widespread harm to the overall Japanese economy.

Again it seems every new Japanese government or new Prime Minister has tried to reduce or control inflation again with very little success.

With respects to tariff relief measures most likely the Japanese government should try and help exporters to the US and help them if their sales are decreased due to decreased demand by US consumers as US consumers are going to be hit with increased prices related to tariffs on Japanese products such as cars.

Of course the had to be aware of the WTO and how they help Japanese exporters as they don't want to run afoul of WTO rules related to subsidies like what China might do sometimes.

Cutting the consumption or sales tax might be a good idea or good strategy to help Japanese households but it might increase Japan's debt to GDP ratio which is the highest in the world at this time.

If the sales tax goes from 10 percent to 8 percent which is where it was in 2019, but how much is it really going to help. How much as  2 percent decrease in the sales tax really going to help Japanese households.

Yes, Japan is very much a angering society now with social security spending maybe out of control, but its not the fault of ageing people in Japan, is a government situation that needs to be solved.

And yes, the birth rate in Japan is one of the lowest if not the lowest among all countries and the Japanese government doesn't seem to have a solution except for maybe one possible idea.

And that possible idea is to increase immigration into Japan as bringing in more workers in Japan brings in more revenue into the government which can help with social security situation and bring in more money into the Japanese government. 

Again, the same old tired ideas to try and help the Japanese economy and help Japanese households but with not much success.

The same Prime Minister and the one even before him tried the same ideas of tax cuts and cash payments but with no real success each time, or at least they considered tax cuts but in the end only used cash payments to try and help Japanese households.

The consumption tax or sales tax brings money into the government which the government needs to reduce its significant Debt To GDP ratio situation and helps with the social security problem in Japan. 

The Japanese government doesn't need to increase its spending but needs to find ways to reduce its spending in an economy that is already has the highest debt in the world.

But that is easier said than done when many Japanese households including many on fixed incomes are being challenged with high inflation rates.

The Japanese government is in a situation where whatever if does might be the wrong strategy but it might not have a choice but to increase the debt with steps needed to help Japanese households overcome the inflation situation in Japan.

Even if its 10 percent or even 8 percent as it might be too much as the sales tax while intended to help reduce the social security situation and help fund the government might be too much for some Japanese households especially those on fixed incomes or those with 2 or 3 children, or those working on limited contracts or even part-time workers scrapping by in Japan.

Have a nice day!