Abe denies plan to delay tax hike, dissolve Lower House

Kyodo, Reuters, Staff Report

Prime Minister Shinzo Abe said he has no plans to dissolve the Lower House, brushing aside speculation that he may gamble on a snap election if he decides against raising the consumption tax again next year.

“I’m not considering dissolving the Lower House at all,” Abe told reporters Sunday at Tokyo’s Haneda airport before heading to Beijing for a two-day summit of the Asia-Pacific Economic Cooperation forum that started Monday.

Chief Cabinet Secretary Yoshihide Suga on Monday also denied such speculation.

“The prime minister has the absolute right to dissolve (the Lower House). And the remarks Abe has made is everything” there is to be said on the matter, Suga said during his regular news conference at the prime minister’s office. “The Abe administration’s top priority is to exit from deflation and to revitalize economy.”

Suga also denied speculation that he had suggested to Abe the idea of an early dissolution of the Diet.

Still, some members of Abe’s Liberal Democratic Party said they are getting ready for an early election.

“I’m urging the party to prepare for an election in case of any Diet resolution in the near future,” Toshimitsu Motegi, director general of the LDP’s election strategy committee, told reporters Monday in Naha, Okinawa Prefecture.

On Sunday, the Yomiuri Shimbun reported that Abe was considering dissolving the Lower House and calling a snap election if he delays the plan to hike the consumption tax next October to 10 percent. His team raised it to 8 percent from 5 percent last April.

If Abe does dissolve the Lower House, an election could be held on Dec. 14 or Dec. 21, the Yomiuri reported, citing several government and ruling party sources.

Abe has also told members of the LDP’s coalition partner, Komeito, of this plan, the newspaper said.

The report was apparently based on leaks from sources close to Abe, and was seen as a possible bluff by the administration to urge opposition parties to stop delaying Diet deliberations on key administration bills.

Despite a spate of recent funding scandals involving key ministers, Abe’s Cabinet has maintained a relatively high approval rate of around 50 percent in media polls. Meanwhile, opposition parties, including the Democratic Party of Japan, have failed to capitalize on the scandals, garnering just a fraction of that support in recent campaigns.

If Abe were to dissolve the Lower House now, opposition parties would likely suffer a defeat in a snap election. The administration would also be able silence criticism from ruling lawmakers who want the sales tax hike to proceed as scheduled.

Abe could delay the tax hike by a year and a half in the event of dismal third quarter gross domestic product figures that are due to be released next Monday, the Yomiuri said.

A delay would not be without risks, though, since next year’s sales tax hike has already been passed into law. Abe would have to repeal this in the Diet, leaving himself open for criticism.

Abe could also be assailed for delaying the government getting much-needed tax revenue for rising welfare costs.

Abe on Sunday also reiterated his position that any decision on the tax hike would take into account economic data and discussions with experts.

The administration is expected to make its decision after assessing revised gross domestic product data for the July-September period, due out Dec. 8.

In the wake of the first consumption tax hike in April, the economy contracted an annualized real 7.1 percent in the April-June period — its worst contraction since first quarter 2009.

In a television interview Friday, Abe said he was not contemplating an early election but left some wiggle room by noting that this is something prime ministers must always say.

If Abe were to delay the tax hike, any snap election would essentially be a referendum on his economic policies.

The last Lower House election was held in December 2012. It saw the LDP and Komeito storm back to power after a brief period in the opposition.

  • Eagle

    He is not planning, he is manipulating.