Japan: Fiscal Discipline of Local Governments

2015.6.11

Nobuyuki Uda

Director-General Research and Co-ordination Department

Policy Research Institute Ministry of Finance, Japan

1

Fiscal Policy for Long-Term Growth and Sustainability in Aging Societies

Five issues to be addressed

1. What are the challenges that LGs (local governments) are facing?

2. How is the fiscal situation of LGs?

3. How the CG (central government) copes with disparity among LGs in tax revenues?

4. What are the impacts of fiscal transfers (from the CG to LGs) on fiscal discipline of LGs?

5. How the CG strengthens fiscal discipline of LGs?

2

Contents

Ⅰ. Local Governments and their Expenditure <4-9>

Ⅱ. Fiscal Situations of Central and Local Governments <10-11>

Ⅲ. Revenue of Local Governments <12-26>

Ⅳ. Financial Soundness of Local Governments <27-29>

Ⅴ. Summary <30-31>

3

1. Structure of local governments

Chief executives (governors and mayors) / members of assemblies

Elected through direct elections

4

Prefectures (47)

Government designated

cities (20)

Core cities (42)

Special cities (40)

Other cities (688)

Towns (745)

Villages (183)

Metropolitan Special Wards

(23) (790 cities*)

(1,718 Municipalities)

Ⅰ. Local Governments and their Expenditure

*Requirements for cities includes population >500,000 (designated cities); >300,000 (core cities); >200,000 (special cities); >50,000 (cities)

**

2. Expenditure of central and local governments

58.3

100 87 78 74 72 74 70 67

82

38 41 45

0 0

81

41.7

0 13 22 26 28 26 30 33

18

62 59 55

100 100

19

0%10%20%30%40%50%60%70%80%90%

100%

Local Central 5

(FY2013 settlement) <White paper 2015>

3. Expenditure of Local Governments

Classification by function

General administratio

n 10%

Public welfare

24%

Sanitasion 6%

Agriculture, forestry and

fishery 4%

Commerce and

industry 6%

Civil engineering

work 12%

Fire service 2%

Police 3%

Education 17%

Public debt payments

14%

Others 2%

Total ¥97,412 billion

Classification by type

Personnel expenses

23%

Public assistance expenses

12%

Debts service

13%

Ordinary construction

work expenses

15%

Goods expenses

9%

Subsidizing expenses

10%

Others 18%

Total ¥97,412 billion

6

(Net total of prefectures and municipalities) (FY2013 settlement) <White paper 2015>

Aging and declining of population are expected to continue.

(1) Aging of population and public welfare expenses

3602 3249 2601 2204 1849 1297

5608 7622 7888 7183 6559 4643

618

1489 2204 3308 3657

3768

1965 1990 2000 2014 2025 2050

Trends in Population (million) under 20 20～64 65 and over

Source: For data up to 2000, Census data by Statistics Bureau of Ministry of Internal Affairs and Communication. For data from 2014, Population Projections for Japan by National Institute of Population and Social Security Research

7

4. Challenges of local governments

① Trends of population structure

② Trends of public welfare expenses With aging, welfare expenses are expected to grow rapidly.

5304 5550 7139 7423 7254 7183

4811 5707 5482 5707 5725 5662

4763 5251 5064 5283 5567 5645 2937 3250 3597 3765 3905 3964

7 10

35 1005 701 1008

2008 2009 2010 2011 2012 2013

(billion yen) Child welfare Elderly welfare Social welfarePublic assistance Disaster relief

8

<White paper 2015 >

FY: settlement

(2) Aging of infrastructure and maintenance expenses

• Infrastructures, including roads, rivers, sewages, and sea ports, which were developed in high growth era (1955-1973), are rapidly aging.

• Maintenance and repair expenses are increasing.

989 982

1052 1063

1110 1110 1127

900

950

1000

1050

1100

1150

2007 2008 2009 2010 2011 2012 2013

(billion yen)

9

Maintenance and repair expenses of local governments (settlement) <White paper2015>

10

Ⅱ. Fiscal Situations of Central and Local Governments

• FY2015 budget / local public finance program (expenditure・revenue: general account , long-term debt outstanding: estimate / end of FY2015)

CG LGs

Total expenditure ・ revenue ¥96 trillion ¥85 trillion Tax revenue ¥55 trillion ¥37 trillion Gov. bond issues／revenue 38.3 ％ 11.1％ Debt service／expenditure 24.3％ 15.2％ Long-term debt outstanding ¥837 trillion ¥199 trillion

1. Comparison of fiscal indicators

Fiscal situation of LGs is far better than the CG.

2. Trends of long-term debt outstanding

573 621

662 694 731 770

809 837

197 199 200 200 201 201 201 199

0

100

200

300

400

500

600

700

800

900

2008 2009 2010 2011 2012 2013 2014 2015

Central gov. Local gov.(estimates) (estimates)

11

CG: increasing LGs: stable

End of FY

¥ trillion

Source: MOF

(FY2013 settlement) <White paper 2015> Corporate

enterprise tax 8% Corporate

residents tax 8%

Individual residents tax

34%

local consumption tax

8%

Fixed asset tax 24%

Others 18%

Total ¥35,374 billion

12

Ⅲ. Revenue of Local Governments 1. Local taxes Tax revenue (net total of prefectures and municipalities)

2. Grants from the Central Government

• %, FY2013 settlement <White paper 2015>

¥101,100 billion ¥51,573 billion ¥57,029 billion

13

(1) Composition of revenue of local governments

0%10%20%30%40%50%60%70%80%90%

100%

Net total Prefectures Municipalities

Other revenue resources

Local bonds

Local tax

Other CG transfer

Local allocation tax

National Subsidy

Gra

nts f

rom

the

CG

PPPublic

(Trillion yen)

Social Security 18.2

(71%)

Education & science

2.2 (9%)

Public work 2.7

(10%)

Others 1.1 (4%)

FY2015 Budget ¥ 24.1 trillion*

Social Security 10.5

(52%)

Education & science

3.4 (17%)

Public work 2.7

(11%)

Others 1.0 (4%)

FY2002 Budget ¥ 20.4 trillion

14

National Subsidies: Funds disbursed from the CG to LGs for specified uses

*Total of General Account. (Total including Special Account for Reconstruction from the Great East Japan Earthquake is ¥ 25.7 trillion)

Special Account for Reconstruction from the Great East Japan Earthquake 1.6 (6%)

(2) National subsidies

1) Financial equalization function (Equalizing revenue sources)

To adjust imbalances in tax revenue among LGs (To aim at equalization) → eliminate difference in fiscal strength among LGs

2) Funding guarantee function （Guaranteeing revenue sources）

・Macro： to guarantee revenue sources as a whole by stipulating in law that the total amount of the LAT grants is certain ratios of five national taxes ・Micro：to guarantee revenue sources so that LGs in whatever region can provide a certain level of administrative services.

15

(3) Local Allocation Tax grants （LAT grants） ① Functions

Considering huge deficit of the CG, there are arguments on whether it is appropriate for the CG to provide funding guarantee for LGs.

(net total of prefectures and municipalities) (excluding taxes in excess of standard tax rate) Index; Average=100 FY2013 settlement

0 50 100 150 200Hokkaido

AomoriIwate

MiyagiAkita

Yamagatafukushima

IbarabiTochigiGunma

SaitamaChibaTokyo

KanagawaNiigata

ToyamaIshikawa

FukuiYamanashi

NaganoGifu

ShizuokaAichiMie

<White paper 2015>

0 50 100 150 200ShigaKyotoOsakaHyogo

NaraWakayama

TottoriShimane

OkayamaHiroshima

YamaguchiTokushima

KagawaEhimeKochi

FukuokaSaga

NagasakiKumamoto

OitaMiyazaki

KagosimaOkinawaAverage

16

167.7

64.9

② Local taxes per capita Wide disparities exist in local tax revenues per capita among LGs.

17

③ Classification of Local Allocation Tax grants

1) Regular Local Allocation Tax grants

・ To be allocated to LGs where financial resources are insufficient (94% of the total amount of the LAT grants)

2) Special Local Allocation Tax grants

・ To be allocated in response to special financial requirements which are not covered by regular LAT grants (6% of the total amount of the LAT grants)

18

④ Determination of total amount of LAT grants

ⅰ） Statutory Local Allocation Tax grants

・ 33.1% of income tax and corporate tax

・ 50% of liquor tax ・ 22.3% of consumption tax ⅱ）Special addition, etc. Local public finance

measures taken each year, including transfer from general account and debt repayment

Income tax

Corporate tax

Liquor tax Consumption tax

Tobacco tax

1954 (initial budget) 19.66 19.66 20.0

24.0 29.0

25.0 25.0

1954 (supplementary budget)

19.874 19.874 20.0

1955 1956 1957 1958 1959～1961 1962～1964 1965 1966～1988 1989～1996 1997～1998

22.0 25.0 26.0 27.5 28.5 28.9 29.5 32.0 32.0 32.0

1999 2000～2006 2007～2013 2014 2015 2016

32.0 32.0 32.0 32.0 32.0 33.1

32.5 35.8 34.0 34.0 34.0 33.1

32.0 32.0 32.0 32.0 32.0 50.0

29.5 29.5 29.5 22.3 22.3 22.3

25.0 25.0 25.0 25.0 25.0

--

Ratios of sources for Statutory LAT grants %

Local bond issues 10.6

National subsidies 12.5

④-2 Local Allocation Tax grants to cover gaps

Salaries 20.3

General Administration

35.1

Investment 11.0

Local debt servicing 13.0

Others 5.9

Expenditures 85.3

Revenues 85.3

Local Public Finance Program (FY2015)

Gap 21.4

Local taxes 40.3

19

Others 5.5

The central government guarantees financial resources to cover the

local revenue shortfall

Local Allocation Tax grants, etc.

21.4

See Annex [17] for details

(Figures in trillion yen)

National subsidies 13.1

Local Local bond* 5.0

*Local bond excluding Special bonds for financing revenue shortage

Ministry of Internal Affairs and Communications (MIC)

20

⑤ Allocation of Local Allocation Tax grants

( Standard financial requirements ― Standard financial revenues ) ＝ Financing gap (criteria for amount of LAT grants) Standard financial requirements ＝Unit expense × Measurement unit × Adjustment coefficient

Unit expense： Expense per one measurement unit of each administrative scope Measurement unit： Index which reflects quantity of financial requirements of each administrative scope reasonably and objectively Adjustment coefficient： To reflect difference of administrative expenses due to natural and social condition of each local government Standard financial revenues ＝ Standard local tax revenue×75％＋local transfer tax, etc.

21

1) Example of expenses, measurement unit (prefectures, FY2014) Expenses Measurement unit

Roads and bridges Area size of roads, Length of roads

Rivers Length of rivers

Elementary school Number of teachers & staffs (based on standards set by the CG)

Public assistance Population in towns and villages

Social welfare Population

Elderly welfare Population aged 65 or more, Population aged 75 or more

Public debt payments Public debt repayments for specified debts (50%～100%) (ex. Bonds for disaster recovery (95%), Extra fiscal measure bonds (100%))

⑤-2 Example of expenses, measurement unit and adjustment

2) Example of adjustment Adjustment Purpose of adjustment Example

Coldness adjustment

To calculate extra expenses due to a degree of coldness or snow

expenses for elementary and junior high school ・difference in allowances in cold area ・expenses for heating and snow clearing

Investment situation adjustment

To reflect actual financial requirements in investment expenses for each LG a) LG portion or b) interests and repayments of local bonds

roads and bridges expenses ・interest and repayments for public work bonds

22

⑤-3 Factors to be used in calculating standard financial revenues

• Standard financial revenues ＝standard local tax revenue×75％ ＋Local transfer tax, etc.

a) Standard local tax revenue：calculated with standard tax rate b) Local transfer tax：collected as a national tax and transferred

to LGs (ex. local road tax)

c) 75％ ⅰ) To allow LGs to execute their own policies which are not included in the

standard financial requirements ⅱ) To secure incentives for LGs to increase tax sources

⑥ Local taxes and LAT grants per capita

FY2013 settlement

0 100000 200000 300000 400000Hokkaido

AomoriIwate

MiyagiAkita

Yamagatafukushima

IbarabiTochigiGunma

SaitamaChibaTokyo

KanagawaNiigata

ToyamaIshikawa

FukuiYamanashi

NaganoGifu

ShizuokaAichiMie

108,813

<White paper 2015>

0 100000 200000 300000 400000ShigaKyotoOsakaHyogo

NaraWakayama

TottoriShimane

OkayamaHiroshima

YamaguchiTokushima

KagawaEhimeKochi

FukuokaSaga

NagasakiKumamoto

OitaMiyazaki

KagosimaOkinawa

23

¥ ¥

337,266

171,138*

*Local tax revenue of Tokyo excludes amount of revenues equivalent to municipality taxes (Tokyo is not a recipient of LAT grant, because Standard financial revenues are higher than Standard financial requirements.)

Local taxes per capita LAT grants per capita (Population as of 2014.3.31)

(prefectures) (Local taxes excludes tax revenue transfer to municipalities)

LAT grants seem to widen disparities among LGs rather than promoting revenue equalization. ← LGs with high “debt” and/or high “investment expenses” get more LAT grants. (Annex[23])

⑥-3 Essence of calculation of standard financial requirements

• Most of the calculations are based on objective data such as population.

• Exceptions: – debt service expenses – Investment expenses

24

Increase of local government bonds (and/or investment expenses)

Increase of standard financial requirements

Increase of allocation of LAT grants Moral hazard?

Reforms to reduce the scope of application of investment situation adjustments (ex.) Reform in FY2010: local government bonds with investment situation adjustments

about 50% → about 30% (after transitional period) of total local government bonds

⑦ Implication of LAT grants on fiscal discipline of LGs

・ LAT grants have financial equalization function and funding guarantee function and contribute to the sound fiscal situation of local governments.

However, ・ local governments with high debt and/or high investment

expenses get more LAT grants (Annex [23]) ・ Moral hazard of LGs The CG compensates for shortage of revenues → Revenue without any burden on LGs → LGs tend to lose incentive to cut expenditures ⇒ With growing fiscal demand in the aging society, fiscal burden of

central government tends to increase

• Considering the fiscal situation of the CG, is it appropriate to maintain funding guarantee function of LAT grants?

25

26

MIC (for prefecture or government designated cities) Governor (for Municipalities)

LG (or Public

enterprise) Consult

LG with deficit or debt payment over the level set for by Cabinet Order (LGs with real debt payment ratio of 18% or more / public enterprises with deficit over 10 % of business revenues)

Approval

With consent of MIC (or Governor)

Without consent of MIC (or Governor)

Bonds/Loans with consent*

Report to the assembly

Bonds/Loans without consent

Bonds/Loans with approval*

*For only the bonds/loans which obtained the consent or approval of MIC, LG may borrow from the government funds or Japan Finance Organization for Municipalities. Debt payments for the bonds/loans with consent or approval will be included in LAT grants formula.

* Permission by the MIC (Minister for Internal Affairs and Communications) was required before FY 2005. Consultation process was introduced in FY 2006 to enhance local autonomy.

3. Local government bonds

¥12,285 billion issued in FY 2013

[Consultation process]

Ⅳ. Financial Soundness of Local Governments

– Disclosure of comprehensive fiscal condition including

contingent liabilities – Early Warning System – Reconstruction System

27

1. The Law Relating to the Financial Soundness of Local Governments

Fiscal indicator Definition

1 Real deficit ratio The ratio of deficit to the standard fiscal scale

2 Consolidated real deficit ratio

The ratio of consolidated deficit in the all accounts to standard fiscal scale

3 Real debt payment ratio

The ratio of debt payment by general revenue to standard fiscal scale

4 Future burden ratio The ratio of outstanding debt including future burdens of public enterprises and government affiliates, to standard fiscal scale

5 Funding shortfall ratio at public enterprises

The ratio obtained by dividing the previous fiscal year’s shortfall in funds for each public enterprise by the previous year’s business scale

2. Early warning

• If one of fiscal indicators exceeds the early warning limit ⇒ fiscal soundness through LG’s own efforts

– Formulation of financial plan (approval by assembly), external auditing required

– Report of progress of implementation to assembly and public announcement every fiscal year

Early warning limit Prefecture Municipalities Real deficit ratio 3.75% 11.25～15% (depending on fiscal size)

Consolidated real deficit ratio 8.75% 16.25～20% (depending on fiscal size)

Real debt payment ratio 25% 25% Future burden ratio 400% 350% (government-designated cities: 400%)

28

* Management improvement limit: funding shortfall ratio at public enterprises 20%

3. Rebuilding

• If one of fiscal indicators exceeds the rebuilding limit ⇒ rebuilding through involvement of the CG

– Formulation of financial rebuilding plan (approval by assembly), external auditing required

– The fiscal reconstruction can seek consultation and agreement from MIC.

• (No agreement) Restriction on the issue of local government bond, except for disaster recovery projects, etc.

• (Agreement) Allowed to issue special deficit-financing bond

– If fiscal management is deemed not to conform with the plan, etc., necessary measures including budget changes are recommended by MIC

– The LG can issue special deficit-covering local government bond whose repayment and interest are covered by special LAT grant

Rebuilding limit Prefecture Municipalities Real deficit ratio 5% 20% Consolidated real deficit ratio 15% 30% Real debt payment ratio 25% 35%

29

Ⅴ. Summary • LGs are facing challenges such as aging of the population and

infrastructure. <7-9>

• Fiscal situation of LGs (as a whole) is better than that of the CG. <10-11>

• LGs are dependent on fiscal transfer from the CG. <13-25> – Fiscal transfer may weaken fiscal discipline of LGs. – Potential deficits of LGs are transferred to from LGs to the CG. – LAT grants have functions of financial equalization and funding guarantee. – Funding guarantee function of LAT grants is under argument.

• For the allocation of LAT grants, standard financial requirements should be calculated only by objective data rather than by reflecting actual amount of spending. <24> – Criteria reflecting actual spending may invite moral hazard problems. – Reform has been made to reduce the scope of application of investment

situation adjustments. 30

• The CG controls issuance of local bonds. <26> – Some issues are under market discipline.

• The CG uses fiscal indicators to monitor and control local public finance. <27-29>

• Under the rebuilding scheme, LG is required to formulate financial rebuilding plan with agreement of the CG. <29> – The LG is provided with financial assistance from the CG through

issuance of special local bonds, whose debt services are covered by special LAT grants.

31

Ⅴ. Summary (continued)

Annex

Supplementary information on

Local Public Finance

32

33

[1] Relationship between the central and local governments

• LG are independent from the CG • Organization and operations of LGs are regulated by

law (legislation of central government) “in accordance with the principle of local autonomy” (Article 94, Constitution)

• Local assembly can enact, amend or abolish bylaws (=ordinances):

enact their own regulations within law

34

[2] Role of the central and local governments (1) Role of the central government 1） Matters relating to its position as a nation in the international

community 2） Matters concerning basic rules on national activities or local autonomy

that should be standardized nationally 3） Matters concerning policies and programs to be implemented on a

national level or from a national viewpoint

(2) Role of local governments To promote the welfare of its residents （Administrative matters close to the people shall as far as possible be referred to local public bodies）

Most of administrative services that are closely related to the life of citizens are implemented by LGs. ← Involvement of the CG, including obligation through legislation (Example) standards of the number of teachers and staffs

[3] Composition of expenditure of prefectures and municipalities

Prefectures

Public welfare

15%

Commerce and

industry 8%

Civil engineerin

g work 11%

Education 21%

Public debt payments

15%

Others 30%

Total: 50,053 billion

Municipalities

General administrat

ion 13%

Public welfare

35%

Civil engineerin

g work 12%

Education 10%

Public debt payments

11%

Others 19%

Total: 54,860 billion

35

(FY2013 settlement) <White paper 2015>

By function

[4] Change in major expenses (Net prefectures and municipalities)

0

5000

10000

15000

20000

25000

2007 2008 2009 2010 2011 2012 2013

FY2013 settlement

Public welfareCivil engineering workEducation

36

<White paper 2015>

[5] Share of elderly is growing rapidly

7.1 7.9 9.1 10.3 12.1

14.5 17.4

20.2 22.8

26.8 29.1 30.3 31.6

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

% of population aged 65 and over % of population aged 65 and over

Source: For data up to 2010, Census data by Statistics Bureau of Ministry of Internal Affairs and Communication. For data from 2015, Population Projections for Japan by National Institute of Population and Social Security Research (Medium-fertility (mortality)projection) 37

[6] Share of elderly (65 and over) in major developed countries

1990 2000 2010 2015 2020Japan 11.9 17.2 23 26.4 28.6U.S. 12.5 12.4 13.1 14.7 16.6U.K. 15.7 15.8 16.6 18.1 18.9Germany 15 16.3 20.8 21.4 23.1France 14.1 16 16.8 18.7 20.3

05

101520253035

% of Population

Source: (Japan)For data up to 2010, Census data by Statistics Bureau of Ministry of Internal Affairs and Communication. For data from 2011, Population Projections for Japan by National Institute of Population and Social Security Research (Other countries) World Population Prospects: The 2012 revision (medium projection) United Nation 38

[7] Aging of infrastructure

• Infrastructures, including roads, rivers, sewages, and sea ports, which were developed in high growth era (1955-1973), are rapidly aging.

March 2012 March 2022 March 2032

Roads and bridges (length > 2m) １６ ４０ ６５

Tunnels １８ ３１ ４７

River management facility ２４ ４０ ６２

Sewages ２ ７ ２３

Port quay (water depth > 4.5m) ７ ２９ ５６

39

Percentage of social capital that elapsed more than 50 years after construction <Budget Bureau of MOF, October 2013 Fiscal System Council >

* % approximately

[8] Trends of expenditure and tax revenue

0

20000

40000

60000

80000

100000

12000019

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

1020

1120

1220

13

LG tax revenueLG expenditureCG tax revenueCG ecpenditure

40

¥ billion

FY settlement

CG: the revenue gap is increasing LGs: the revenue gap is relatively stable

[9] Trends of Expenditure of the Local governments

0

5000

10000

15000

20000

25000

2007 2008 2009 2010 2011 2012 2013

By function

Public welfare

Civil engineering work

Education

41

<White paper 2015> (FY2013 settlement)

0

5000

10000

15000

20000

25000

30000

2007 2008 2009 2010 2011 2012 2013

By type

Personnel expenses

Ordinary construction work expenses

Public assistance expenses

(Net total of prefectures and municipalities)

[10] Trends of the # of local government officials

0

500

1000

1500

2000

2500

3000

2007 2008 2009 2010 2011 2012 2013 2014

thou

sand

As of April 1

Number of Local government officials

Police and fire serviceEducationGeneral administration

42

<White paper 2015>

# of local government officials are decreasing.

[11] List of local taxes

Normal taxes Object taxes

Prefecture Prefectural residents tax, Enterprise tax, Local consumption tax Real property acquisition tax, Prefectural tobacco tax, Golf course utilization tax, Automobile acquisition tax, Light oil delivery tax, Automobile tax Mine-lot tax, Fixed property tax

Hunting tax, Water utility and land profit tax

Municipality Municipal residents tax, Fixed property tax, Light Vehicle tax, Municipal tobacco tax, Mineral product tax, Special land acquisition and holding tax,

Bathing tax, Business facility tax, City planning tax, Water utility and land profit tax, Common facilities tax, Residential land formation tax, National health insurance tax

43

[12] Tax revenue of prefectures and municipalities

Prefectures

Corporate enterprise

tax 18%

Corporate residents

tax 6%

Individual residents

tax 34%

local consumpti

on tax 18%

Automobile tax 10%

Others 14%

Total: ¥14,774 billion

Municipalities

Corporate residents

tax 10%

Individual residents

tax 34% Fixed asset

tax 42%

City planning

tax 6%

Others 8%

Total: ¥20,600 billion

44

(FY2013 settlement) <White paper 2015>

45

[13] Local government taxation autonomy

LGs are not bound by the standard tax rates if there are needs in their fiscal condition, etc.

(Exception: local consumption tax has a uniform tax rate.) ← Tendency to be levied on corporations that have no voting rights

(Table 13-1) Tax in excess of standard tax rate (FY2013 settlements)

(Municipalities includes municipal taxes collected by the Tokyo Metropolitan Government.)

Amount Share in total tax rev. Prefectures ¥ 243 billion 1.4 ％ Municipalities ¥ 283 billion 1.5 ％

[13-1] Tax rates exceeding the standard tax rates

⇒ Tax in excess of standard tax rate has very small share in total tax revenue.

46

[13-2] Non-statutory tax ・ LGs can introduce new taxes which are not stipulated in Local Tax Law, if they

have special needs.

(Minister for Internal Affairs and Com. gives consent unless; ) ⅰ） Tax whose tax base is shared with another tax (national tax) and imposes

extremely heavy burden on inhabitants ⅱ） Tax which significantly impedes distribution of goods across the boundaries

of municipalities (or prefectures) ⅲ） In addition to the above, tax which is not appropriate in the light of the

national economic policy ← Problem of taxation on specific corporations / taxation on residents of other

communities

Amount Share in total tax rev. Prefectures 32 billion 0.19 ％ Municipalities 3 billion 0.02％

（Example） Nuclear fuel tax, Industrial waste tax, Hotel and accommodation tax, Fishing tax

（Table 13-2） Non-statutory tax （FY 2013 settlement)

⇒ Non-statutory taxes have very small share in total tax revenue.

[14] Classification of subsidies in the Local Finance Law

Classification Article (share) Explanation Example

Ordinary subsidies Article 10 (all or part of expenses *shall be borne by the central gov.)

The interests of both the CG and LGs → The CG is expected to positively bear in order to assure the smooth performance

Expenses for public assistance (poor relief) ・ subsidies for public assistance (3/4)

Subsidies for construction work expenses

Article 10-2 (all or part of expenses*)

Construction works which carried out by LGs in accordance with integrated plans established in conformity with national economy

Expenses for establishment and improvement of important civil engineering facilities such as roads (5/10～)

Subsidies for related to disasters

Article 10-3 (part of expenses*)

LGs which take such measures can hardly find financial resources commensurate with financial needs under the Local Tax Law or the Local Allocation Tax Law

Expenses for recovery works for disaster damaged civil engineering facilities such as roads (8/10～)

Subsidies for consignment

Article 10-4 (all of expenses *)

All of the expenses affecting solely the interest of the CG shall be borne by the CG

expenses for election of members of the Diet (10/10)

Encouraging subsidy

Article 16 The CG may grant subsidies to LGs, when subsidies are found especially necessary for the execution of its policies or for the finance of LGs

47

PPPublic

(Trillion yen)

CG LG Salary of teachers and staffs of elementary and junior high school 1/3 2/3

Road construction (ordinary case) 1/2 1/2

Public Assistance 3/4 1/4

Long-term care 2.5

National health

insurance 2.5

Social Security 18.2

(71%)

Education & science

2.2 (9%)

Public work 2.7

(10%)

Medical care for the elderly

5.5

Public assistance

2.9

Child-care and child allowance 2.2

Disability support program 1.3

Others 1.1 (4%)

Compulsory education 1.5

FY2015 Budget ¥ 24.1 trillion*

48

Special Account for Reconstruction from the Great East Japan Earthquake 1.6 (6%)

[15] Details of National subsidies

2) Burden sharing of subsidized expenses (example)

1) Detailed composition of national subsidies

[16] Implication of subsidies on fiscal discipline of LGs

・ Subsidies are effective tool for the CG to provide certain level of public service nation wide

・ National minimum; minimum standard to be satisfied by all regions ・ Balanced development among all regions

However, ・ As national minimum being achieved, local autonomy tends to

be emphasized. 1) Involvement of the CG through subsidies 2) LGs have to meet conditions set by the CG 3) Priorities are given to project with national subsidy 4) Promote dependency on the CG

→ LGs may lose autonomy and fiscally dependent on the CG

49

The case of FY 2015 local public finance program/budget

50

Revenue shortage

2.9

Special addition to LAT grants

1.45 Extra fiscal measure

bonds 1.45

Extra fiscal measure bonds for

debt service 3.1

Others 1.8

Statutory local allocation tax

13.6

Special bonds for financing revenue shortage whose debt service cost are fully counted in standard financial requirements

Local allocation tax 16.8

(Figures in trillion yen)

Special allocation, surplus in special accounts, etc.

7.8

[17] How to fill the gap (Total amount of LAT grants)

51

(note) Numbers of police officers / teachers & staffs are based on standards set by the CG. The same applies for municipalities (teachers & staffs).

Expenses Measurement unit

Police Number of police officers

Roads and bridges Area size of roads Length of roads

Rivers Length of rivers

Ports and Harbors Length of Mooring facilities (ports / fishing ports) Length of harbor facilities (ports / fishing ports)

Other civil engineering works

Population

Elementary school Number of teachers & staffs

Junior high school Number of teachers & staffs

Senior high school Number of teachers & staffs Number of students

Specially supported school

Number of teachers & staffs Number of classes

Other educational Population Number of students in university & college (public / private)

Public assistance Population in towns and villages

Social welfare Population

Health & sanitation Population

Elderly welfare Population aged 65 or more Population aged 75 or more

Labor Population

Agriculture Number of farmhouses

Forestry Area size of forestry (publicly owned / others)

Fishery Number of fisherman, etc. Commerce & industry Population

Tax collection Number of household

Pension for retired public employee*

Number of eligible recipient * System changed in 1959

Regional development Population

Regional economy & employment

Population

Regional revitalization Population

[18-1] Item of expenses and measurement unit (prefectures, FY2014)

52

[18-2] Item of expenses and measurement unit (municipalities, FY2014)

Expenses Measurement unit Fire service Population

Roads and bridges Area size of roads Length of roads

Ports and Harbors Length of Mooring facilities (ports / fishing ports) Length of ports facilities (ports / fishing ports)

Urban planning Population in urban planning area

Parks Population Area size of city parks

Drains Population

Other civil engineering works

Population

Elementary school Number of students Number of classes Number of schools

Junior high school

Number of students Number of classes Number of schools

Senior high school Number of teachers & staffs Number of students

Other educational Population Number of children in kindergartens

Public assistance Population in cities

Social welfare Population

Health & sanitation Population

Elderly welfare Population aged 65 or more Population aged 75 or more

Cleaning & garbage disposal

Population

Agriculture Number of farmhouses

Forestry & fishery Number of those engaged in forestry and fishery industry

Commerce & industry Population

Tax collection Number of families Family register & basic resident register

Number of registered family Number of families

Regional development Population Area size

Regional economy & employment

Population

Regional vitalization Population

[18-3] Other expenses included in standard financial requirements

Expenses Measurement unit Expenses to be calculated comprehensively

ax ＋ by x： population that reflects differences in cost due to population size Y： area size that reflects differences in cost due to types of land use (introduced from FY2007 to reduce the number of expenses through merger with simple calculation method based on population and area size)

Public debt payments Public debt repayments for specified debts (50%～100%) such as; Bonds for disaster recovery (95%), and Extra fiscal measure bonds (100%)

53

(Prefectures and municipalities)

[19-1] Adjustment coefficient

Adjustment coefficient

Purpose of adjustment Example

Classification adjustment

To calculate difference in unit cost of each classification for measurement unit which has classification

ports and harbor expenses (classification of specially designated major ports, major ports, local ports)

Stage adjustment

To calculate increase or decrease of unit cost of measurement unit which has economies of scale

difference in expenses per capita such as expenses for chief of municipalities (mayors) due to population size

Density adjustment

1) To calculate increase or decrease of unit cost due to the degree of population density 2) To calculate difference in ratio of unit cost from the ratio for standard LG

1) fire service expenses (difference in cost due to population density and area size) 2) social welfare expenses (difference of operational expenses for nurseries)

Ordinary situation adjustment

1) To calculate difference in expenses due to difference in quality and quantity of public services such as urbanization 2) To calculate difference in administrative authority among cities, towns and villages

1) fire service expenses (difference in capacity for fire service) 2) expenses for public health center (difference between cities with public health center and other cities)

Current situation adjustment

To calculate differences in current expenses based on situation which is not related to classification

Other industry expenses (difference in required current expenses among types of industries)

54

Adjustment coefficient reflects differences in financial requirements due to differences including natural and social conditions of each LG.

Adjustment coefficient

Purpose of adjustment Example

Investment situation adjustment

1) To calculate necessity of investment expenses using objective figures that reflect degree of necessity in the best way in accordance with types of investment expenses 2) To reflect actual financial requirements in investment expenses for each LG a) include LG portion of the fiscal year, or b) include interests and repayments of local bonds

1) Roads and bridges (difference in necessity of repair such as ratio of non-repaired portion and number of traffic accidents) 2) roads and bridges expenses (interest and repayments for special public work bonds to construct or repair local roads)

Coldness adjustment

To calculate extra expenses due to a degree of coldness or snow a) difference in salaries (including allowances), b) degree of coldness, or c) degree of snows

expenses for elementary and junior high school (difference in allowances in cold area and expenses for heating and snow clearing)

Rapid increase/ decrease adjustment

To calculate extra expenses for LGs where populations, etc. have been increased or decreased rapidly

Merger adjustment

To include expenses necessary immediately after merger to integrate administrative function, etc.

Fiscal strength adjustment

When including a certain ratio of interests and repayments of local bonds, the ratio is higher for LG where the proportion of interests and payments to tax revenue is higher

expenses for disaster relief work

55

[19-2] Adjustment coefficient (continued)

[20] Data of Standard financial requirements

Prefectures Municipalities

Expenses to be calculated by items (a)

17,425 (93.7%)

17,567 (75.4%)

Expenses to be calculated comprehensively (b)

1,441 (7.8%)

2,784 (11.9%)

Public debt payments (c)

3,137 (16.9%)

2,941 (12.6%)

Total of the above (d) = (a) + (b) + (c)

22,003 23,291

Amount equivalent to transferred Extra fiscal measure bonds (e)

3,410 2,185

Total (standard financial requirements) (d) – (e)

18,593 21,106

56

FY2014 (¥ billion) (source: Ministry of Internal Affairs and Communications)

( ): percentage share of (d)

Public debt payments has large shares in standard financial requirements

(note) non-recipients of LAT grants such as Tokyo are excluded from the above data.

57

(Expenses for roads and bridges) a) standard financial requirements ＝Unit cost per 1km×length of roads×(investment adjustment＋ public works adjustment＋coldness adjustment) (unit cost) (measurement unit) (adjustment coefficient) b) Calculation for each prefecture (Niigata prefecture, FY2013) ¥ 17.8 billion＝ ¥ 1,982,000× 5,941km×（0.893＋0.504＋0.113）

(Note) ・ Measurement unit ・length of roads＝length of roads in the road register stipulated in article 28 of Road Law, which are

under administration of a local government ・Adjustment coefficient ・investment adjustment＝reflecting necessity for road repair (ratio of non-repaired portion as compared with nation-wide average, etc.) ・public works adjustment＝ to include a portion of interest and repayments for special public work

bonds to construct or repair local roads (in response to actual amount of public works) ・ coldness adjustment＝reflecting excess cost to prevent freezing, etc. (degree of coldness) reflecting excess cost in snow region such as wider width (degree of snows) ・Unit cost：unit cost per 1 km (¥ 1,982,000／km) ¥7,730 million (general financial resources for standard local government)／3,900km (length of roads

for standard local government)

[21] Example of calculation of standard financial requirements

<source: 平成26年度 地方交付税のあらまし>

58

[22] Allocation of regular LAT grants

A) Non-recipient LGs (Standard financial requirements) < (Standard financial revenues ) ⇒ Non-recipient of regular LAT grants (*Tokyo←)

B) Adjustment between total amount and amounts to be allocated a) The standard rules of Local Allocation Tax Law ⅰ） (total amount of regular LAT grants) ＞ (total amount to be allocated)： ⇒ excess amount is added to the special allocation tax ⅱ） (total amount of regular LAT grants) ＜ (total amount to be allocated)： ⇒ allocated amount is decreased proportionally （→ When substantial difference continues, to revise the system or to change ratios of sources for

statutory allocation tax to five major taxes)

b) Actual operation After deciding on the total amount, calculation measures of standard financial requirements (i.e.

unit cost and adjustment coefficient) are revised every year;

(total amount of LAT grants) = approximately (amounts to be allocated)

2012 2013 2014

Prefecture 1* 1* 1*

Municipalities 47 48 54

[23] LAT grants and ordinary construction per capita and real debt payment ratio

FY2013 settlement

050000

100000150000200000250000

0.00

10.00

20.00

30.00

<White paper 2015> 59

¥ %

0.00

10.00

20.00

30.00

40.00

50.00

050000100000150000200000250000300000¥ %

Real debt payment ratio LAT grant per capita

(prefectures)

¥ Ordinary construction per capita

LGs with high “debt” and/or high “investment expenses” tend to get more LAT grants.

(prefectures) FY2013 settlement

050000

100000150000200000250000

020,00040,00060,00080,000

100,000

<White paper 2015>

60

¥ ㎢

0

2,000

4,000

6,000

8,000

10,000

050000100000150000200000250000300000

¥ ㎢

Area size LAT grant per capita

[24] LAT grant per capita and area size

[25] Local tax and General revenue per capita

(Population as of 2014.3.31)

(¥; FY2013 settlement) 0 100000 200000 300000 400000

HokkaidoAomori

IwateMiyagi

AkitaYamagatafukushima

IbarabiTochigiGunma

SaitamaChibaTokyo

KanagawaNiigata

ToyamaIshikawa

FukuiYamanashi

NaganoGifu

ShizuokaAichiMie

Average

<White paper 2015> 0 100000 200000 300000 400000

ShigaKyotoOsakaHyogo

NaraWakayama

TottoriShimane

OkayamaHiroshima

YamaguchiTokushima

KagawaEhimeKochi

FukuokaSaga

NagasakiKumamoto

OitaMiyazaki

KagosimaOkinawaAverage

63.3 / 221.6

61

Local tax per capita General revenue per capita

(Comparison of Prefectural government)

Local tax revenue of Tokyo excludes amount of revenues equivalent to municipality taxes. (However, average includes tax revenue of Tokyo equivalent to municipality taxes.)

[26] General revenue per capita and area size FY2013 settlement

0

100000

200000

300000

400000

020,00040,00060,00080,000

100,000

<White paper 2015>

62

¥ ㎢

0

2,000

4,000

6,000

8,000

10,000

0

100000

200000

300000

400000¥ ㎢

Area size General revenue per capita

(prefectures)

[27] General revenue per capita and real debt payment ratio FY2013 settlement

0

100000

200000

300000

400000

0.005.00

10.0015.0020.0025.00

<White paper 2015>

63

¥ %

0.00

5.00

10.00

15.00

20.00

25.00

0

100000

200000

300000

400000¥ %

Real debt payment ratio General revenue per capita

(prefectures)

[28] General revenue ordinary construction per capita FY2013 settlement

0

100000

200000

300000

400000

0

10

20

30

<White paper 2015>

64

¥ ¥

0

10

20

30

40

50

0

100000

200000

300000

400000¥ ¥

Ordinary construction per capita General revenue per capita

(prefectures)

65

[29] International comparison of equalization scheme

Japan U.K. France Germany

Ver t i

ca l

Eqa l i za t i on

Total

Fixed proportions of five natiolal tax Amount of special addition is determined to fill the gap based on Local Public Finance Program

To be set in the Spending Review that the CG launches, considering requirements in the fiscal policy of the CG

Total amount is determined during the budget formulation process every year, considering fiscal situation of the CG

Sum of amounts to be allocated

Allocation methods

[revenue・requirements adjustment]

To calculate standard financial requirements and revenues for each LG and to allocate according to their difference

[revenue・requirements adjustments]

To calculate relative needs amount and relative resource amount, for each LG and to allocate according to their difference, etc.

[revenue adjustments]

To allocate based on criteria such as ①population, ②revenue per capita, ③fiscal efforts

[revenue adjustments]

After horizontal equalization, to allocate grant in the amount of 77.5% of portion below 99.5% to states where revenues per capita are less than 99.5% of the national average

Horizontal equalization － －

[revenue adjustments]

Equalization funds among Commune (2012～) :

Communes where standard tax revenue per capita is more than 90% of national average contribute to the fund. The fund provides grants to communes whose index reflecting tax revenue per capita, etc. is relatively low. [revenue・requirements adjustment] Equalization funds from value added tax on corporates (2013～) :

LG where standard tax revenue per capita is more than national average, etc., contribute to the fund out of VAT revenue. The fund provides grants to local governments according to the level of revenue per capita, population, length of roads, area size, etc. In addition to the above, there exists funds for horizontal equalization.

[revenue adjustments]

① To allocate up to 25% of states portion of VAT revenue, while giving priority to states where tax revenues per capita are less than the national average ② After ①, Funds contributed by states where revenues per capita are more than the national average are granted to states where revenues per capita is less than the national average

・The U.S. Federal Government does not have equalization scheme. The U.S. introduced General Revenue Sharing (GRS) in 1972, where the Federal Government provided grants to local governments according to a certain formula. The grants can be used for public security, environment, transportation, health, recreation, library, welfare, and fiscal administration. However, GRS was abolished in 1986 (Grants for state governments was abolished in 1981.). <Source: 主要国の地方税財政制度 2001.6 財務総合政策研究所>

[30] Classification of Local government bonds

(Local government bonds issued in FY 2013)

55%

45%

Issuer

Prefectures

Municipalities

<White paper 2015>

16%

49%

35%

classification by purpose

Bonds forpublic works

Bonds forextraordinaryfinancialmeasures

Other bonds

66

Total: ¥ 12,285 billion

Local Government bonds: Obligations undertaken by local public entities to raise financing. Repayment periods are longer than one fiscal year.

Classification by issuer and purpose

[31] Fund sources for Local government Bonds

36%

64%

fund sources

PublicfundsPrivatefunds

(Local government bonds issued in FY 2013)

Fiscal Loan funds 25%

JFM* funds 11%

Loans from Gov. and its

affiliated agencies

1%

Underwritten by banks 35%

Public market issue 27%

Others 1% Details of fund sources

67 *JFM: Japan Finance Organization for Municipalities

Total: ¥ 12,285 billion

FY2013 <White paper 2015>

[32] Trends in outstanding local government borrowing

130.3 129.0 127.7 124.4 121.2 118.5 115.8 114.4 110.7 107.1 104.1 101.0

3.8 9.1 12.9 15.7 17.9 19.7 21.6 25.4 31.4 36.1 40.6 45.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Outstanding at the end of FY Other local bonds Bonds for extraordinary financial measures

134.1 ¥ trillion

68

145.9

Share of bonds for extraordinary financial measures is increasing

[33] Consultation Process for issuance of LGB

69

The Ministry of Internal Affairs and Communications prepares the Local Government Bond Plan every year in line with the Fiscal Investment and Loan Program Plan of the Ministry of Finance. (Local government Bond Plan includes estimates of bond issuances by type and purpose.)

Before debt issue, LGs must consult with a) the Minister of Internal Affairs and Communications (MIC) ←in the case of prefectures and government designated cities b) the prefectural governor ←in the case of municipalities ⇒ Only for local government bonds with consent by MIC or the prefectural governor, LGs may borrow public funds (Government funds, JFM funds).

Consent Debt payment for bonds with consent included in LAT grants formula

Without consent

In order to issue the local government bonds (underwritten by private sector) without the consent*, the head of the LG must report it to the assembly. * LGs that satisfies certain criteria such as below;

・ real-debt-payment-ratio# lower than 16% ・ amount of real deficit is 0, etc. #The ratio of debt payment by general revenue to standard fiscal scale

Standard for consent by the CG MIC releases the standard for consent every fiscal year. Issuers in high deficit, issuers with high real-debt-payment-ratio, and public enterprises in high deficit, etc. must obtain the approval of issuance from MIC

[34] Local governments that can issue bonds without consultation

Number of local governments that can issue bonds without consultation and reported bond issue (FY 2013) <平成16年度 地方債のあらまし>

Prefecture / government-designated cities Municipalities Real deficit 0 Consolidated real deficit ratio 0 Real debt payment ratio Less than 16% Future burden ratio 300% or less 200% or less Total amount of consulted bonds / sum of standard fiscal size and business scale of public enterprise (average of three previous fiscal years)

25% or less

70

Prefecture g. designated cities municipalities total

# of LGs 33 (70%) 19 (95%) 1,564 (91%) 1,616 (90%)

# of LGs reported bond issue 22 (47%) 14 (70%) 275 (16%) 311 (17.4%)

Amount of bonds reported ¥ 2,746 billion ¥ 542 billion ¥ 282 billion 3,570 billion

[35] International comparison of Borrowing controls

<Alexander Plekhanov and Raju Singh, How should subnational government borrowing be regulated?, IMF Staff Papers Vol. 53, No.3, 2007>

Regime Example

Market discipline

Subnational governments decide by themselves to adopt a fiscal rule (Canada, Switzerland, United States).

Administrative constraints

Setting of annual limits on the overall debt (Lithuania), special treatment or prohibition of external borrowing (Mexico).

Rule based controls

Restrictions on overall budget deficits (Austria, Spain), operating budget deficits (Norway), level of accumulated subnational debt (Hungary), level of spending (Belgium, Germany). Limit borrowing to investment purposes (Germany).

Cooperative arrangements

Negotiation process between the federal and the lower levels of government designs subnational borrowing controls (Several European countries, Australia).

71

[36] Coverage of fiscal indicator

72

LGs

General Account

Special Accounts Of which Local Public Enterprise Accounts

Ordinary Account

Local

Project Accounts

Joint entities by LGs for particular projects

Local public corporation, third-sector enterprise, etc.

Real deficit ratio

Con- solidated

real deficit ratio

Real debt

payment ratio

Future burden

ratio

Funding shortfall Ratio*

*Calculated for each public enterprise account

[37] Number of local governments whose ratio exceeds early warning limit and rebuilding limit

(note 1) FY2013 settlement (note 2) () : number of local governments whose ratio exceeds reconstruction limit *: Yubari City in Hokkaido Izumisano City (in Osaka prefecture) exceeded early warning limit (future burden ratio) in FY 2012 settlement , but not in FY 2013 settlement

Prefecture

(47)

Designated cities (20)

Cities

(792)

Towns Villages

(930)

Net total

(1,789)

Real deficit ratio 0 0 0 0 0 Consolidated real deficit ratio 0 0 0 0 0 Real debt payment ratio 0 0 1(1) 0 1 (1) Future burden ratio 0 0 1 0 1 Total 0 0 1(1) 0 1 (1)*

73

[38] The case of Yubari city

• Yubari City (Hokkaido) • Population: 10,922 (2010 Population Census of Japan)

・ Area size: 763.2 km2

(70 km east of Sapporo)

74

• Population had dropped sharply in the 1980s following the closures of coal mining industries.

(116,908 in 1960→12,307 in 2007) • Efforts by the city to revive the local

economy (amusement parks, ski resorts, etc.) ended up in failure, which led to fiscal crisis.

• Placed under reconstruction scheme in 2007.3

Yubari

[38-1] About the city

[38-2] FY2008 Financial Restoration Plan

• Period: (base year: FY2006) ～FY2024 – The plan has been revised every FY

• Main measures – Reduction of expenditure

• cutting numbers of officials – 269 in 2006.4 → 134 in FY2009 → 103 in FY2010 (excluding special account staffs)

• 17%～29% salary cut from standard salary (average 30% cut from FY2006) for general staff, etc.

• Reduction (about 40% of goods expenses • Reduction (about 40%) of subsidies, etc.

– Increase of revenue • Raising taxes - Municipal income tax: per capita ¥3,000→¥3,500 for individual income 6%→6.5% - Fixed income tax: 1.4% → 1.45%, etc. • Charging for garbage collection, etc.

75

(2007.3.6)

(2010.3.2 approved by the assembly, 2010.3.9 agreed by MIC) ← based on new legislation enacted in 2008.4

• Period: FY2009 ～FY2029 – The plan has been revised every FY*

• Main measures – Reduction of expenditure

• cutting numbers of officials – 309 in FY2006 → 160 in FY2009 → 124 in FY2026 (total, including special account staffs)

• Average 20% salary cut from standard salary for general staff, etc. • Reduction of subsidies, etc.

– Increase of revenue • Raising taxes • Charging for garbage collection, etc.

76

[38-3] FY2009 Financial Rebuilding Plan

⇒ Yubari city issued special deficit-covering local government bond (¥ 32.2billion)

(Financial Rebuilding Plan revised in 2015.3)

0

20

40

60

80

100

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

Real Debt Payment Ratio

RDPR

77

8.6%: average of municipalities (FY2013 settlement)

2008 2009～

Real deficit ratio 703.6％ 0

Consolidated real deficit ratio 705.67％ 0

％

[38-4] Trends of fiscal indicators of Yubari City

[38-5] Trends of Future Burden Ratio of Yubari city

0

200

400

600

800

1000

1200

1400

Real Debt Payment Ratio

Future burden ratio

350%: early warning

50%: average of municipalities (FY2013 settlement)

％

78

<Reference> ・地方財政の状況 平成27年3月（総務省） (White paper 2015) ・地方財政要覧-平成25年12月-（一般財団法人 地方財務協会） ・平成26年度 地方交付税のあらまし（地方交付税制度研究会編） ・平成26年度 地方債のあらまし（地方債制度研究会編） (Internet sources) ・ Ministry of Finance http://www.mof.go.jp/english/index.htm ・ Cabinet Office http://www.cao.go.jp/index-e.html ・ White paper on local public finance, 2014-Illustrated-http://www.soumu.go.jp/iken/zaisei/26data/chihouzaisei_2014_en.pdf ・ Ministry of Internal Affairs and Communications http://www.soumu.go.jp/english/index.html ・ Ministry of Health, Labor and Welfare http://www.mhlw.go.jp/english/index.html ・ Japan Local Government Bond Association http://www.chihousai.or.jp/english/ ・ Japan Finance Organization for Municipalities http://www.jfm.go.jp/ ・ National Institute of Population and Social Security Research http://www.ipss.go.jp/index.asp

79

The content of this presentation material reflects the presenter’s personal view and does not represent the official view of the Ministry of Finance or the Policy Research Institute.