Abe wants earlier talks on hiking sales tax to 10%


Prime Minister Shinzo Abe has signaled his intent to bring forward to November talks on raising the consumption tax rate to 10 percent in 2015, with plans to reach a final decision in December.

“When economic data for July to September start to be released, I want experts to gather to analyze the statistics and hold discussions” on hiking the levy from the current 8 percent rate, Abe said in a speech Friday at a meeting hosted by the Research Institute of Japan.

Abe suggested that intensive talks with macroeconomic experts on the issue will kick off before the Nov. 17 release of preliminary gross domestic product data for the three-month period, and that a final conclusion will be reached in December once the economic picture for that quarter becomes clearer.

“The government places its top priority on the economy, with the aim of overcoming deflation. . . . A tax hike that hurts the economy would make no sense,” Abe said.

The sales tax was hiked from 5 percent to 8 percent on April 1 this year and is scheduled by law to rise to 10 percent in October 2015, providing Abe gives the green light.

According to recent government data, GDP in the April-June period nose-dived a real 7.1 percent from the previous quarter on an annualized basis due to impact of the first stage of the tax hike. It was the biggest contraction since GDP plummeted 15 percent from January to March 2009 on the heels of the global financial crisis that erupted the previous year.

On the diplomatic front, Abe stressed the need to mend bilateral relations with China that have been badly frayed by disputes over history and the sovereignty of the Senkaku Islands off Taiwan. Tokyo controls the islets in the East China Sea, but that has been contested by China and Taiwan.

“It is important for the two countries to go back to the basics of their mutually beneficial strategic relationship and to calmly continue efforts to hold dialogue by utilizing international meetings,” Abe said.

Abe said he wants to hold his first meeting with Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation forum summit to be held in Beijing in November. Due to the strained Sino-Japanese relationship, no such meeting has taken place between the two sides since Abe and Xi took office in December 2012 and March 2013, respectively.

Regarding domestic issues, Abe said he aims to kick-start his plan for reviving economies and communities outside Tokyo during the extraordinary Diet session expected to be convened on Sept. 29, suggesting his administration will submit related bills.

Abe further emphasized the government will proceed with plans to restart the No. 1 and No. 2 reactors at Kyushu Electric Power Co.’s Sendai nuclear plant in Kagoshima Prefecture. He also gave assurances that the government will respect the Nuclear Regulation Authority’s safety screenings, which Abe touted as “scientifically and technologically the strictest in the world.”

Earlier this month, the two reactors passed a major part of the safety checks needed for reactivation. While all 48 of Japan’s viable nuclear reactors are currently offline, the two Sendai units are viewed as the first likely to be brought back online.

As to his Cabinet’s decision in July to change the government’s interpretation of the Constitution, rather than amend it, so Japan can exercise the right to collective self-defense, Abe said his administration will prepare “a seamless legal system” for national security. He added that he wants to see “an active nationwide debate” on national security issues, stressing his government will make further efforts to win over a public that remains deeply skeptical about compromising Japan’s pacifist stance.

  • B.L.Sharma

    Wishing PM Shinzo Abe a very HAPPY BIRTHDAY today and hope the relations between India and Japan will attain new height in the coming years under his wise leadership contributing to stability in Asia and world peace.