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How will Japan’s economy be revitalized as it is struggling amid the novel coronavirus pandemic? Each candidate for the ruling Liberal Democratic Party presidential election needs to present to the public measures necessary to realize policies for economic revitalization in an easy-to-understand manner.
One of the points of contention in the party leadership race is what parts of the Abenomics economic policy package of the Cabinet led by former Prime Minister Shinzo Abe should be carried over and what should be changed.
Taro Kono, state minister in charge of administrative and regulatory reform, said Abenomics failed to increase the salaries of workers. He has stressed an intention to expand tax cuts for companies that raised wages.
Former LDP Policy Research Council Chairman Fumio Kishida also said he would revise the policy line, calling for a shift from neo-liberalism that places importance on competition in the market. He intends to make efforts to increase the wages of nurses and certified childcare workers, among others, by correcting the disparity through income redistribution.
Former Internal Affairs and Communications Minister Sanae Takaichi said that she would accelerate Abenomics and boost investment in advanced technologies. Seiko Noda, LDP executive acting secretary general, stated that investment in children was the best growth strategy.
However, many of the proposals made by the candidates are questionable in terms of their effectiveness and feasibility, or lack a concrete methodology for what exactly should be done.
Regarding the social security system, in an open debate on Sept. 18, Kono proposed that the pension system should have a minimum guarantee that would provide a certain amount of benefits, which should be financed by taxes rather than insurance premiums.
However, he did not mention how much the consumption tax rate should be raised for that purpose. A responsible explanation is needed.
Kishida, who was against Kono’s proposal, said, “I would not consider raising the consumption tax rate for about 10 years.” However, Kishida said he would continue to call for fiscal reconstruction. If so, he should present concrete measures on how to rebuild the nation’s fiscal condition.
Another major challenge is to achieve a decarbonized society with net-zero greenhouse gas emissions by 2050.
Kono insisted that aiming for solar power and other renewable energy sources to cover all of Japan’s electricity supply in the future is “not a pipe dream.” As for nuclear power plants, he said those that have reached the end of their expected lifetimes will be decommissioned and nuclear power plants “will eventually be reduced to zero.”
However, the amount of electricity generated from renewable energy is subject to weather variability and other factors. Stable power sources, such as nuclear and thermal power, and storage batteries are essential to make up for the shortfall. But large-scale storage batteries capable of adjusting power supply and demand are still under development. It is risky to propose 100% renewable energy as a future electricity source without convincing data that supports the proposal.
Kishida and Takaichi are calling for the continuation of technology for nuclear power generation and the development of small modular reactors, which are seen as next-generation nuclear reactors. Discussions should be deepened on effective policies to balance a stable supply of electricity and decarbonization.
— The original Japanese article appeared in The Yomiuri Shimbun on Sept. 22, 2021.
