Japan Press Weekly

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2019 April 17 - 23 [POLITICS]

LDP executive remark hints that consumption tax hike could be postponed

Liberal Democratic Party Acting Secretary-General Hagiuda Koichi, who is also known as Prime Minister Abe’s loyal aide, on April 18 made a remark suggesting the possibility of shelving the consumption tax rate increase to 10% scheduled for October.

On a Web TV program on the day, Hagiuda pointed out that as an essential prerequisite to the planned consumption tax hike, the Japanese economy needs to be on a recovery path.

He noted that the results of Bank of Japan’s quarterly economic survey (the “Tankan” survey) and other major official data show the worsening of Japan’s economic condition, and expressed his concern that the tax hike would discourage economic recovery. He also cited the fact that even within the LDP, some call for the cancellation of the consumption tax hike to 10% in October. He said that depending on the results of the BOJ “Tankan” June survey, the tax hike plan might “take another turn”.

Later in the same day, asked for a comment on Hagiuda’s remark by the press, Japanese Communist Party Chair Shii Kazuo in the Diet building said, “The JCP has been pointing out that when economic conditions are bad, a 2%-increase in the consumption tax rate is suicidal for Japan.” He added that it is significant that Hagiuda made the remark indicating that the LDP is hesitating to go ahead with the sales tax rise.

Shii expressed his determination to strengthen the party’s efforts to push the Abe government to give up on increasing the consumption tax rate.

The government in March downgraded its assessment of the economy based on the Cabinet Office’s business condition index and monthly economic report. In addition, the “Tankan” March survey results, which were released on April 1, showed that business confidence fell to its lowest level since the second Abe administration was inaugurated in 2013.

Past related articles:
> Diet passes FY 2019 budget [March 28, 2019]
> Koike: FY2019 draft budget would ruin Japanese society [December 22, 2018]
> Shii demands cancellation of tax hike plan, citing decline in both wages and consumer spending [May 19, 2016]