Takaichi does not rule out government bonds to fund food consumption tax cut

Prime Minister Sanae Takaichi said in the upper house Budget Committee on the morning of 19 October that she does not deny issuing government bonds as part of the funding for a consumption tax cut on food. She said she would scrutinise the scale of public finances and appropriately control the full-year bond issuance amount across the initial and supplementary budgets, as in the previous fiscal year. [ 3 , 7 , 8 , 12 ]

She was answering Yoshifumi Hamano (浜野喜史) of the Democratic Party for the People, who asked whether issuing bonds as needed would be a proper response. Nikkei reported that Hamano said that if funding came from reduced government spending, it could cancel out the effect of the tax cut. Takaichi also said she would review both spending and revenue within the framework of budget compilation reform, according to Asahi and Nikkei. [ 7 , 8 , 9 ]

Takaichi had previously said the cut would not rely on special bonds (deficit-financing bonds). Chief Cabinet Secretary Minoru Kihara said at a press conference that she had spoken about the budget as a whole and that the government's policy had not changed. Nikkei and Mainichi reported that Takaichi posted on X that she meant that, for the budget as a whole, she does not deny bond issuance. Nikkei said she wrote that the policy of not relying on deficit-financing bonds for the cut is unchanged. A Tokyo Shimbun headline described the remarks as hinting at a policy shift. [ 8 , 12 , 13 , 17 ]

In the afternoon session, Mainichi reported, Takaichi told Taku Yamazoe (山添拓) of the Japanese Communist Party that the funding would be secured without relying on special bonds and that the concrete picture would be shown in the budget compilation process. Nikkei reported she said that of about 9 trillion yen in non-tax revenue, about 6 trillion yen has no designated use and she would consider adding to it. Finance Minister Satsuki Katayama said the tax special measures subject to review amount to at least about 1 trillion yen on a simple total. [ 8 , 17 ]

Takaichi also rejected the labels "Takaichi yen weakness" and "Takaichi high interest rates", saying she would raise confidence in the yen by building a strong economy. [ 5 , 6 , 8 , 12 ]

She apologised again over the effective dismissal of former agriculture minister Kazuo Yanagi (簗和生), saying that resigning does not remove a politician's accountability. Asked whether he should be summoned to the Diet, she said it is for the Diet to decide. Sankei and Mainichi reported she said Education Minister Yoshihiro Seki (関芳弘), who held a political fundraising party in a Diet members' office building, should reflect and carry on with his duties; Sankei said she learned of the issue only when it was reported. [ 3 , 9 , 12 , 17 ]

The two-day Budget Committee questioning ended on 19 October. The consumption tax cut bill, which the government and ruling parties regard as the most important of the session, was due to enter lower house deliberation on 20 October. [ 3 , 12 ]