Prime Minister Shinzo Abe on Sunday vowed to redouble his efforts to lift personal consumption through additional stimulus measures.
In a televised policy debate with leaders of other political parties ahead of the Dec. 14 House of Representatives election, Abe, who also heads the ruling Liberal Democratic Party, admitted that the effects of his “Abenomics” policy mix have yet to benefit non-urban areas of Japan.
“Abenomics is still only halfway” to achieving its goals, he said, adding that further stimulus is needed to spur consumption.
Japan sank back into recession after shrinking by an annualized real 1.6 percent last quarter. That was after a precipitous 7.3 percent plunge in the April-June quarter was blamed on the first stage of the consumption tax hike, which raised the levy to 8 percent from 5 percent on April 1.
Natsuo Yamaguchi, head of Komeito, the LDP’s junior coalition partner, said it is important to ensure wage hikes keep pace with inflation. He said Komeito will seek a lower tax rate for daily necessities in April 2017, when the doubling of the sales tax to 10 percent is now due to be completed.
Abe postponed the October 2015 tax hike after reviewing the economy. The LDP and Komeito said they will speed up talks on which items to cushion against the levy and how to make up for the lost tax revenue.
Banri Kaieda, head of the Democratic Party of Japan, the leading opposition party, criticized Abe’s economic policies, noting that wages won’t rise unless more full-time jobs are made available and the pressure to use temps abates.
Takeo Hiranuma, chairman of Jisedai no To (Party for Future Generations), called for fundamental deregulation. He noted that “the ‘third arrow’ of Abenomics has major problems.”
Japanese Communist Party chief Kazuo Shii blamed the April tax hike for the economic slump. He said the LDP, Komeito and DPJ are “heavily responsible” for the present state of the economy, reminding viewers that they agreed to raise the sales tax in two stages when they signed an accord to that affect in 2012, when the DPJ was in power for the first time.
Ichiro Ozawa, a former DPJ chief who leads Seikatsu no To (People’s Life Party), said the economy will not recover without boosting consumption.
Social Democratic Party chief Tadatomo Yoshida also denounced Abenomics as a policy that only favors the rich and big companies.
On the vote-value gap between the nation’s least and most populous electoral districts, Abe said he will respect the Diet’s decision earlier this year to set up a panel under the Lower House speaker to discuss steps to rectify it. The gap favors the LDP.
Kaieda and Toru Hashimoto, who is co-leader of Ishin no To (Japan Innovation Party) and mayor of Osaka, also agreed to respect the decision but urged drastic reform to reduce the number of seats in the Diet.
Kaieda criticized Abe for doing “nothing” in the two years since the November 2012 agreement between Abe and former Prime Minister Yoshihiko Noda of the DPJ to take steps to shrink the Diet.
Hashimoto argued that salaries of government employees and Diet members should be cut amid worsening fiscal conditions.
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