Edging closer to a tipping point

The FY2012 budget has increased our concerns that a tipping point in Japan’s public finances is getting closer. The proposed increase in the consumption tax to 10% would not be enough to put the public finances on a sustainable track. A larger increase is needed, and soon, but is highly unlikely without a specific mandate from the electorate as support from the opposition and even some elements of the ruling party is non-existent.