Politics · Japan · 2 hrs ago
Takaichi says deficit bonds will not fund Japan food tax cut
Japan’s Prime Minister Sanae Takaichi addressed how a food sales tax cut would be funded in parliament.
She said she would not rule out issuing government bonds as part of the budget overall, but later reaffirmed that special deficit bonds would not fund the tax cut.
Takaichi had previously said the cut would not rely on deficit-covering bonds, prompting questions about whether her position had changed.
Chief Cabinet Secretary Minoru Kihara said her remarks concerned budget-making as a whole and did not change the government’s policy.
Takaichi said the government would manage bond issuance across the initial and supplementary budgets and review both spending and revenue.
The government says it will weigh the tax cut against its aim of keeping public debt stable, but the sources give no further details on the cut’s funding plan.
Prime Minister Sanae Takaichi said she had not ruled out issuing government bonds while discussing how to fund a cut in the consumption tax on food.
She said annual bond issuance would be managed appropriately across the initial and supplementary budgets, as in the previous fiscal year.
Takaichi had previously said she would not rely on special deficit-covering bonds to pay for the tax cut.
Chief Cabinet Secretary Minoru Kihara said her remarks addressed budget-making as a whole and did not change the government’s policy.
On October 20, Takaichi reiterated that she would not rely on deficit-covering bonds to fund the cut.
- Who
- Prime Minister Sanae Takaichi discussed the funding of a food consumption tax cut. Opposition lawmaker Yoshihisa Hamano questioned her in the upper house Budget Committee.
- What
- Takaichi said she had not ruled out issuing government bonds, while saying bond issuance would be managed across the budget. She later reiterated that she would not rely on special deficit-covering bonds for the tax cut.
- When
- October 19, 2026, with a further statement reported on October 20.
- Where
- The October 19 exchange took place in Japan’s upper house Budget Committee.
- Why
- The discussion concerned how to fund a proposed consumption tax cut on food.
Sanae Takaichi and the government
Yoshihisa Hamano
Bond funding
Sanae Takaichi and the government
Takaichi said she did not rule out bond issuance as part of managing the overall budget, but said she would not rely on special deficit-covering bonds to fund the tax cut.
Yoshihisa Hamano
Hamano challenged the view that government bonds were inherently bad and argued that cutting government spending to fund the tax cut could cancel out its effect.
Takaichi told the upper house Budget Committee she did not rule out government bond issuance and said issuance would be managed across the budget.
Chief Cabinet Secretary Minoru Kihara said Takaichi was speaking about the budget process as a whole and that the government’s policy had not changed.
Takaichi reiterated that she would not rely on special deficit-covering bonds to fund the food tax cut.
- Prime minister
- Sanae Takaichi
- Tax under discussion
- Consumption tax cut on food
- Committee
- Upper house Budget Committee
- Government’s stated bond position
- No reliance on special deficit-covering bonds to fund the tax cut
- Statement dates
- October 19 and 20, 2026
3 sources
What people are saying
I do not rule out the issuance of government bonds.
I will appropriately control the annual amount of government bond issuance through the initial and supplementary budgets, as in the previous fiscal year.
Could this be an extension of the conventional way of thinking that government bond issuance is evil?