BRISBANE, AUSTRALIA – Prime Minister Shinzo Abe is likely to hold a press conference Tuesday to announce his decision to dissolve the House of Representatives, possibly on Wednesday, in order to hold a snap election.
He will also probably put on hold a planned additional consumption tax rate hike.
“Generally speaking, it is impossible to push ahead with policy measures without understanding and cooperation from the public,” Abe told reporters in Brisbane after attending a two-day Group of 20 summit that ended earlier on Sunday.
The remark was interpreted to indicate Abe is ready to decide to put off the consumption tax hike from 8 percent to 10 percent planned for October 2015 and break up the all-important lower chamber of the Diet for an election to seek voter judgment on the postponement.
It is the first time for Abe to publicly make a comment signaling his readiness to dissolve the Lower House.
Abe said a major mistake of the Democratic Party of Japan was that the party, while in power, made a decision to raise the consumption tax rate without specifying it in its campaign manifesto and without seeking voter judgment in an election.
While noting that a tax hike will be intended to increase revenue, Abe said that if a tax increase dampens the economy and causes deflation, revenue will decrease.
“A level-headed decision is now needed,” Abe said, strongly suggesting his intention to put top priority on overcoming deflation in Japan and push back the additional consumption tax hike. The tax rate was lifted to 8 percent from 5 percent last April 1.
Abe is set to make a final decision on whether or not to implement the additional hike by examining economic indicators, including preliminary gross domestic product data for the July-September period. The GDP data will be released Monday.
During Tuesday’s press conference, Abe is expected to announce plans to postpone the sales tax hike by 18 months, until April 2017. He will call for public understanding by explaining that an important policy change requires judgment by the nation’s voters.
Abe is considering setting the general election for Dec. 14
After returning home on Monday, Abe will meet with Natsuo Yamaguchi, head of Komeito, the coalition partner of his ruling Liberal Democratic Party, for final talks on the timing of the Lower House dissolution.
A senior LDP official said that attention should be paid to whether the DPJ, now the biggest opposition party in Japan, will submit a no-confidence motion against Abe’s Cabinet to the Diet.