Prime Minister Sanae Takaichi said on October 19 that she is not ruling out government bond issuance as a way to finance a consumption tax reduction on food, according to 日本経済新聞. Speaking at the Senate budget committee, she said her government would keep full-year bond issuance across both the initial and supplementary budgets under control at levels comparable to the previous fiscal year.
Takaichi said her administration would review both spending and revenue while monitoring tax receipts. She also indicated the government would work out what fiscal scale is feasible as it seeks to steadily lower the debt-to-GDP ratio, the report said. Her remarks came in response to a question from Hiroyoshi Hamano of the Democratic Party for the People.
Hamano pressed the prime minister on whether the government was still treating bond issuance as inherently bad. He argued that offsetting a tax cut by reducing government spending could cancel out the benefits of the reduction, 日本経済新聞 reports.
The exchange points to the central tension in the government's fiscal plans: how to pay for tax relief without abandoning its debt targets. Watch for the government's concrete funding proposals as the tax cut bill moves toward deliberation.
