As the war has now entered its decisive stage, Japan must speedily perfect the measures for utilization of the entire national strength and advance resolutely toward victory by using the entire knowledge and ability of the nation according to the requirements of each moment. The Government's budgets have been formed according to this primary requirement, with stress laid on the increase of the fighting strength and the acquisition of sufficient food supplies. As regards the items of expenditure urgent for the execution of the war, required amounts have been listed. To enable the war prosecution, the first reserve fund of ¥200,000,000 and the second reserve fund of ¥2,000,000,000 have been included in the wartime budget.
Of the total outlay of ¥22,400,000,000 in the budget for the 1945-46 fiscal year, the expenditures decided for various Ministries total ¥7,180,000,000, and the outlay for new enterprises ¥15,210,000,000. Administrative expenditures of various Ministries reach ¥1,310,000,000, and other items in annuities and pensions, subsidies to local districts, the National Treasury's share of pirmary [sic] educational expenditures and others total ¥5,870,000,000.
The main item in the new enterprise expenditure is the amount applied to the Wartime Special Military Expenditure Special Account reaching ¥7,200,000,000. A total of ¥2,140,000,000 is listed for increasing production and adjusting prices, including the subsidy for adjusting the aluminum price, the subsidy for encouraging self-sufficiency in oil and other fuel, the expenditure for increasing the output of timber for military purposes and others. Furthermore, over ¥500,000,000 is listed for the increased production of fertilzers [sic], the maintenance of farmers and engineers, and the expenditures for the production and distribution of fish and vegetables.
Then for the increase of the sea, land, and air transportation facilities, a
sum of ¥360,000,000 is listed, and also ¥190,000,000 for the increase of the military relief fund and for the protection of soldiers, ¥110,000,000 for the adjustment of school systems and schools in line with wartime conditions, and ¥80,000,000 for strengthening the diplomatic activities aiming at the execution of the war and the unity of the total strength of the races of greater East Asia.
Efforts were given to cut the already decided expenditures, and the total was reduced by more than ¥1,600,000,000. But in view of the present war situation, the expenditures for the increase of the fighting strength and the production of foodstuffs have been left untouched. Also the amount to meet the payment of national bond interests has been increased. Thus, the budget for the next fiscal year shows an increase of ¥1,840,000,000 compared with that of the present year.
In view of the recent development of the war situation which demands a thorough intensification of the Government's policies and measures, there may be required supplementaey [sic] budgets, and such are expected to be soon submitted to the Diet as supplementary budget bills.
Of the total budget revenue of ¥22,400,000,000, the revenue from tax and other ordinary revenue items total ¥14,770,000,000 and the national bond issue revenue ¥7,620,000,000. The tax revenue that forms the main item in revenue totals ¥11,730,000,000, including both the ordinary and special revenues, showing an increase of ¥740,000,000 compared with the present fiscal year. The revenue from such indirect taxes as the amusement and alcoholic drink taxes has recently been reduced, due to the war situation, but the income tax and other direct taxes show an increase, reflecting the actual condition of Japan's economy. This is due to the patriotic fervour of the people.
In view of the increase in military expenditures following the progress of the war as well as the recent currency and banking situations, it is believed unavoidable to effect a general increase in taxation. But at the present stage of the war, the Government deems it proper to avoid making a change in the taxation system, and to effect an increased tax revenue by a simple method. Thus the Government has decided to increase the tax rate of the classified income tax, corporation tax, saké tax and other important tax items. At the same time, steps have been taken to simplify the tax collection system and reduce or exempt the collection of taxes considered necessary under the present wartime condition. Respecting the taxation increase plan, a more detailed explanation will be given when such bills are presented.
Together with the proposed taxation increase, the Government has also decided to increase the profit of the Tobacco Monopoly, but this increased revenue will be listed in the supplementary budget and will be applied to the Wartime Special Military Expenditure Special Account.
The revenue from the national bond issue is ¥7,620,000,000, showing an increase of ¥1,530,000,000 compared with the present fiscal year. Also, besides the national bond issue in the general account it is expected that a total bond issue of ¥1,260,000,000 will be made in the special accounts of
Chosen, Taiwan, Karafuto, National Railways and Communications. When the estimated amount of the bond issue as the source of the supplementary budget of all accounts is considered, the total national bond issue in the coming fiscal year is expected to be much larger than in the present year.
The total amount of the national bond issue since the outbreak of the China affair has reached ¥84,970,000,000, of which ¥76,730,000,000 was absorbed. The amount issued during last year was ¥26,990,000,000 of which ¥25,010,000 was bought up. Thus the acquisition of funds through the bond issue and the execution of the budget have been made without any hindrance.
To have the bond issue smoothly absorbed, stress must be laid on the increase of the national savings. The objective in the increase of national savings in the 1944-45 fiscal year was ¥41,000,000,000, and actually by the end of the third quarter of the year, a total increase of about ¥34,500,000,000 was made, including about ¥15,400,000,000 of bank deposits, about ¥7,900,000,000 of postal savings, and others.
This rapid increase made in national savings is due to the efforts of the entire people, and at this moment of emergency, the eagerness of the people to co-operate with the Government must be admired. Yet in the coming fiscal year, a large increase in the national bond issue is expected, and the Government will take proper measures in allotting the increased savings, particularly to the quarters with an increased income. At the same time, over the entire savings system, the Government will give efforts to effect an improvement in its operation, in accordance with the wishes of both the officials and public. When a revision of laws and regulations is required, separate bills will be submitted to the Diet.
All special account budgets have also been formulated in accordance with the general account budget. Giving importance to facilitate the increase of the fighting strength and food production, the expenditures required for urgent requirements have been increased. Those forming the main items in the expenditures for new enterprises include the outlay connected with the production of important materials and the adjustment of their prices, expenditures for increasing foodstuff production, expense for increasing transportation facilities, and expenditures connected with air defence.
When the requirements of the financial fund and the demand of the fund for increasing the fighting strength and production are considered together, the total fund required is expected to increase greatly. Then, with the increase of the financial and industrial funds, an increase in the currency in circulation is inevitable. Since the China affair the currency circulation has been steadily expanding, and the average circulation of Bank of Japan notes during 1944 was ¥12,050,000,000. Though currency circulation expansion is unavoidable, when it goes beyond a proper limit, there is danger of causing an abrupt rise in commodity prices, of disturbing economic stability and lowering the fighting strength behind the guns. Thus the Government has endeavoured to utilize both the financial and industrial funds without any waste and to absorb the fund once paid out, thereby to assure the
stability of the economic order that forms the foundation for the execution of the war.
Regarding the economic policies at this emergency moment of air raids, the Government have already adopted the wartime emergency banking measure and the wartime special damage insurance system. Such measures will be gradually expanded so as to stabilize the people's minds. At the same time, it is also urgent for various economic circles to adjust their structures speedily to meet the recent development of the war situation. Particularly in the manufacturing, supply and labour fields, it is expected that there will be required a speedy readjustment.
Then, to various States and races within greater East Asia, Japan is extending financial aid, and endeavouring to co-operate with them in their respective economic spheres. Even in the future, Japan will not hesitate to give these Asiatic States and races her wholehearted aid and co-operation despite all difficulties under wartime conditions. Thus, we expect to reply to the confidence and expectation of the various States and races of East Asia, by making more efforts for the establishment of greater East Asiatic economy.
Now is the time when the future of the Japanese Empire will be decided. For conquering the present crisis and smashing the ambition of America and Britain, it is necessary to mobilize and concentrate the total strength of the Empire, according to the requirements of the military operations. I sincerely desire that the 100,000,000 people of the Empire will bolster further their strong fighting spirit, co-operate with the brave soldiers at the firing line, engage cooly in the activities behind the guns, exert themselves for increasing production, practise economy, and show their patriotic fervour by responding to the taxation measures and the need for savings, so that they will finally defeat the United States and Britain in this total war.