Ex-PM Abe touts own fiscal, security policies

Yomiuri Shimbun file photo
Former Prime Minister Shinzo Abe speaks at an event organized by the LDP faction led by party Vice President Taro Aso in Tokyo on April 14.

Former Prime Minister Shinzo Abe, the leader of the largest faction of the ruling Liberal Democratic Party, has been outspoken about the nation’s fiscal and security policies in an apparent effort to wield influence over Prime Minister Fumio Kishida.

Abe, who has criticized the government’s goal of bringing the primary balance into the black by fiscal 2025, has called for a bold fiscal stimulus package as well as a significant increase in defense spending.

At a meeting of his faction on Thursday, Abe called for large-scale fiscal spending in the Basic Policy on Economic and Fiscal Management and Reform to be compiled by the government in June.

“[The government] should show its will to drastically invest in various fields, such as biotechnology, drug development and artificial intelligence,” Abe said.

Abe also called for a large increase in defense spending, from the ¥5.4 trillion figure in the fiscal 2022 budget. “It’s necessary to aim for an increase in defense spending to the upper range of the ¥6 trillion level,” he said.

Abe has taken aim at the government’s goal of bringing the primary balance into the black by fiscal 2025. Although the goal was set in 2018 when he was prime minister, he now believes that a flexible response is urgently required in light of the surge in prices due to the coronavirus pandemic and Russia’s invasion of Ukraine, among other factors.

“The primary balance target should not be set based on a fiscal year,” he has said.

A proposal stipulating adherence to the primary balance goal was drafted by the LDP’s Headquarters for Promoting the Fiscal Consolidation chaired by former Finance Minister Fukushiro Nukaga.

In discussions with Nukaga, Abe asked for the primary balance goal to be removed from the proposal, but the former finance minister refused and the proposal was subsequently submitted to the LDP Policy Research Council Board on Thursday.

Abe said to his aides, “There are parts of the proposal that I don’t agree with, but I had no choice but to accept it to help Nukaga save face.”

Regarding the increase in defense spending, Abe has asserted that it could be covered by government bonds. “The Bank of Japan [which is responsible for government bonds] is like a subsidiary of the government. There is no need to worry,” he said.

However, at a plenary session at the House of Representatives on Wednesday, Kishida said: “It cannot be said the government controls the management [of the central bank]. It is not a subsidiary defined by the Companies Law.”

Although Abe has expressed support for Kishida, his aides have said that if the prime minister takes a completely opposite line on fiscal and security issues, Abe might turn against him.

Some LDP members have expressed concern about Abe’s behavior.

“I understand his commitment to economic policy and his enthusiasm as a representative of the conservative wing, but he might be overdoing it,” a veteran LDP lawmaker said.