Prime Minister Shinzo Abe said Tuesday his government will draw up tax-easing measures in the fall as part of its economic growth strategy, and underscored that the nation cannot grow simply through austerity measures.
“We will decide (on the annual reforms) for this year in the fall,” Abe said in a speech at a World Economic Forum meeting in Tokyo, while stressing the need for corporate tax breaks to encourage greater capital spending.
The government normally compiles such reform plans in December before submitting them to the Diet. Shunting the schedule forward apparently reflects how short of market expectations the growth strategy unveiled last week by Abe has fallen.
In his speech, Abe also indicated his administration will put more emphasis on revitalizing the economy to defeat nearly two decades of deflation than on improving Japan’s fiscal health — the worst among major developed countries.
“Japan cannot grow by putting austerity above everything,” Abe said. “We will seek growth at first, and then fiscal rehabilitation.”
On the growth strategy to be approved by the Cabinet this week, Abe reiterated he is considering deregulation to allow foreign doctors to travel to Japan and provide services in designated economic zones.
But when the prime minister last week unveiled the plan’s third pillar, or “third arrow” as he referred to it, the exclusion of specific tax measures disappointed investors and sparked a massive sell-off on the Tokyo Stock Exchange.