Party leaders must discuss specific measures for economic revitalization

The Yomiuri Shimbun

12:03 JST, October 12, 2021

It is important to discuss specific ways to revive the economy while preventing the novel coronavirus from spreading again, as well as how to connect the distribution of wealth to economic growth.

Question-and-answer sessions attended by representatives from both the ruling and opposition parties have started at the Diet, in response to the recent policy speech delivered by Prime Minister Fumio Kishida. The Constitutional Democratic Party of Japan, the largest opposition party, has presented a plan for a change of government aimed at the coming House of Representatives election, for which voting and ballot counting is scheduled to take place on Oct. 31.

CDPJ leader Yukio Edano harshly criticized the government’s measures against the coronavirus pandemic as a failure, and called for benefits to be provided again to businesses whose income has been reduced, to help them maintain their operations and pay the rent. Edano also said the CDPJ would strengthen border control measures against the coronavirus and expand PCR tests.

Kishida said he would present an overall picture of measures to deal with issues related to the coronavirus, including securing hospital beds and medical personnel for COVID-19 patients, and dealing with people who are recuperating at home.

It is vital to be prepared to expand the medical care system in a flexible manner, in case the coronavirus spreads again. There is also a need to steadily resume economic activities through the utilization of vaccination certificates and other means.

Regarding the “virtuous cycle of growth and distribution” that Kishida has touted, Edano said, “This virtuous cycle will never develop just by distributing the fruits of growth,” emphasizing that “appropriate wealth distribution should be the starting point.”

Based on these claims, Edano said his party would aim to exempt people with annual incomes of about ¥10 million or less from income tax for one year and temporarily lower the consumption tax rate to 5%.

Implementing the measures promoted by Edano would reduce tax revenue by ¥18 trillion. According to the government, nearly 90% of households would be exempt from income tax. This would have a serious impact on the nation’s fiscal condition.

Kishida rejected this idea, saying: “I don’t think distribution would be possible without growth. It’s important to aim for growth first.”

Stimulating consumption with temporary pork-barrel spending will not lead to sustainable economic growth. It is essential not only to raise wages at private companies but also to shore up the economy through such measures as promoting investment in growth sectors.

Meanwhile, regarding the strengthening of financial income taxation, Kishida only said this was “an option.”

Kishida apparently made a course correction because he is concerned about the impact on the stock market and other repercussions. But how will he promote the correction of disparities? He needs to clearly explain the specific picture of “a new form of capitalism.”

Edano insisted on realizing a “society without nuclear power generation” and aims to meet the nation’s total demand for electricity via natural energy by 2050. In addition to setting goals, he surely has a responsibility to present realistic ideas.

On foreign and security issues, Edano called for a halt of the construction work to relocate the U.S. Marine Corps’ Futenma Air Station in Okinawa Prefecture, while positioning the Japan-U.S. alliance as the key policy. Won’t his assertion lead to the Futenma base remaining permanently and damage the relationship of trust between Japan and the United States?

— The original Japanese article appeared in The Yomiuri Shimbun on Oct. 12, 2021.