On streets of Tokyo, opinion divided over tax-hike delay

by Tomoko Otake and Mizuho Aoki

Staff Writers

Passers-by polled by reporters in Tokyo on Wednesday were split over the prospect of another delay to the consumption tax hike.

Many people said it would help with their household spending, while others voiced disappointment at Prime Minister Shinzo Abe’s sudden change of heart over raising the rate to 10 percent from the current 8 percent.

In Tokyo’s upscale Shibuya district, Kenichi Ishii, 53, said he supports Abe’s decision, saying he has two young children to look after.

“For a guy like me with children, a consumption tax hike would directly hit the family budget,” he said.

“I understand that the government will eventually have to raise the sales tax, given the state of the nation’s finances. But when I think about my current situation, the decision would be a great help.”

The government has said the tax hike is needed to meet soaring social security costs and to restore the nation’s fiscal health. It earlier warned that the raise could be delayed in the event of a severe economic threat.

Ishii expressed skepticism over Abe’s assertion last week that the global economy is as precarious today as in 2008.

“That can’t be true,” he said. “I believe it was Abe’s ploy to lay the ground for delaying the planned tax hike.

Others agreed with Abe’s decision. One 60-year-old housewife, who gave her surname as Kumazawa, expressed cautious support, adding that the hike will be needed in future.

“I think I should accept the hike eventually, as it is necessary for Japan’s finances,” she said. “To tell you the truth, I don’t want the government to raise the consumption tax any more. It would affect what I buy at supermarkets.”

She added, she will vote for the ruling Liberal Democratic Party in the upcoming Upper House election as she believes it is the only viable option.

Tokyo pensioner Shinji Sato, 70, said the government should ditch the tax hike altogether.

“Even if it postponed the schedule, the rise would be sure to have a negative impact on consumer spending,” Sato said. “I believe the consumer tax hike is unnecessary. The government should conduct a full-fledged review of its spending and reduce the outlays.”

Abe announced Wednesday that he will postpone raising the consumption tax in April 2017 until October of 2019, citing global uncertainties. It is the second time the hike has been delayed. In late 2014, Abe reversed a pledge to raise the tax in October 2015.

Meanwhile, in Tokyo’s Ueno Park, 83-year-old retiree Tadashi Izawa said he was disappointed by Abe’s decision.

“I can’t trust Abe any more,” said Izawa, a former engineer from Shirakawa, Fukushima Prefecture, adding outcome won’t affect elderly people, “because we’ll die soon.”

“But what about future generations? Young people will end up paying the bill. And Abe will shoulder no responsibility, because he will have retired in 2½ years.”

Abe is not expected to be prime minister at the time of the rescheduled hike, as his term as the head of the LDP will have expired.

Mariko Ito, 45, a schoolteacher from Sayama, Saitama Prefecture, said Abe should have stuck to his original plan to raise the tax.

“I was personally bracing for the hike, thinking I may want to buy a car before the hike in April,” she said. “But I guess I won’t have to buy now.”

She added: “It comes down to the issue of trust. Promises made should be kept, because he had said so strongly there would be no more deferment of the tax hike.”

Others said they were happy with the postponement, citing their personal finances.

“I don’t know much about politics, but it’s fine if the tax hike will be delayed,” said a 26-year-old mother from Tokyo’s Koto Ward who was visiting the park with a toddler son.

“I feel the tax is high and it’s tough for us already. I’d rather see politicians cut back on wasteful spending,” said the woman, who give no name. “It’s upsetting to see how (Tokyo Gov. Yoichi) Masuzoe spends the money so lavishly.”

A 35-year-old street musician from Chiba Prefecture, who identified himself only by his first name of Hikari, said he supports Abe’s decision, though he also sees the downside of deferring the hike.

“I bet a lot of factors were considered before he decided to postpone it, what with the Kumamoto quake and so on,” he said. “If the prime minister makes a decision, I’ll follow it.”

Hikari added he has not felt the effects of Abenomics — a much-vaunted mix of fiscal stimulus, ultra-easy monetary policy and regulatory reforms to stimulate growth.

“I don’t feel any effects whatsoever of Abenomics,” he said. “But at the same time, I know it’s not an issue of mine only.”

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