Kishida Tells Cabinet to Finalize Economic Measures by October; Pledges to Aggressively Tackle Issue Over Next 3 Years

The Yomiuri Shimbun

17:28 JST, September 26, 2023

Prime Minister Fumio Kishida on Tuesday instructed relevant Cabinet ministers to finalize new economic measures by the end of October, saying the next three years would be a “time of reform” during which he would aggressively tackle this issue.

“We must not miss this opportunity to move the nation’s economy into a new stage” through such means as vigorous capital investment and wage increases, Kishida said at a Cabinet meeting.

“The important thing is to get off to a good start. In addition to various benefits, we will mobilize all possible means, including reducing the burden put on the public by the tax and social security systems,” he emphasized.

Kishida said the planned new economic measures are based on five pillars — 1) dealing with soaring prices; 2) supporting sustainable wage hikes and regional economic growth; 3) promoting domestic investment; 4) reforming society to overcome the declining population and turn changes into a force for growth; and 5) ensuring the safety and security of the public mainly by strengthening the nation’s resilience to major disasters.

He called on the Cabinet ministers concerned to “actively utilize regulatory and institutional reforms and fiscal investment and loans to improve productivity and create innovation,” and to “effectively implement measures that will contribute to strengthening the economy’s growth potential.”

Specifically, Kishida indicated his policy to award subsidies to local governments that take steps to combat high prices, in keeping with local circumstances, and to conduct a review of reserve funds that were set aside to deal with the novel coronavirus and high prices so that the funds can be used to raise wages.

Kishida also asked the Policy Research Council chiefs of the Liberal Democratic Party and Komeito to make proposals to the government in this regard.

He is aiming to have the new economic measures formulated quickly, through close cooperation between the government and ruling parties, based on the five pillars he presented.

The focus will now be on when to submit a supplementary budget plan to the Diet, which will provide the financial backing for the new economic package, and on how big that budget will be.

Chief Cabinet Secretary Hirokazu Matsuno said at a press conference after the Cabinet meeting: “We will establish truly necessary and effective measures, put together the economic package and then begin compiling a supplementary budget plan as soon as possible. At this point, we’re not at the stage of discussing the size or timing [of the budget plan].”

At another press conference following the meeting, Finance Minister Shunichi Suzuki was asked whether the new economic measures could contribute to inflation.

“We want to carefully assess the necessity of measures and budgets to ensure that inefficient fiscal spending will never cause prices to soar,” Suzuki replied.