4 December 2001, 10:06 Shiokawa - Japan growth unlikely to be negative next fiscal yr
TOKYO (AFX-ASIA) - Finance Minister Masajuro Shiokawa said he
believes economic growth is unlikely to be negative in the next fiscal
year, despite much more pessimistic assessments by many private-sector
economists.
"I believe economic growth for next year will not likely be
negative," Shiokawa told a regular briefing, adding that the government
is ironing out disputes with ruling coalition parties on the outline
for next year's budget.
"I think the ruling coalition parties will accept the government's
budget outline for the new fiscal year because we offered two or three
amendments to our original draft," he said.
Shiokawa conceded that the government had backed down on its plans
to increase workers' contributions to healthcare costs to 30 pct from
April 2003, compared with 20 pct at the moment.
The budget outline now merely says the increase will be introduced
"when necessary", putting the measure on the backburner, after leading
politicians rebelled against the increased burden for workers.
The government also deleted the phrase "drastic cuts" from plans to
reduce assorted tax breaks offered to corporations and individuals.
The ruling parties did agree to some tax hikes, though, on
investments by old-age pensioners and cheap low-malt beer.
"The interest-income tax breaks for senior citizens should be
abolished. Instead, we should increase spending on welfare," Shiokawa
said.
Senior citizens can invest up to 3 mln yen in government bonds and
other securities tax-free at present.
"We need to adjust tax rates between low-malt and regular beer. The
problem is whether the public will accept an increase but the Liberal
Democratic Party tax panel decided on a tax hike," Shiokawa said. "We
would welcome that move."
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