LDP Presidential Candidates Propose Blocking Tax Hike, Payments to Offset Inflation

The Yomiuri Shimbun

15:45 JST, September 13, 2024

Candidates for the Liberal Democratic Party presidency have proposed economic policies, such as blocking a tax hike and payments to offset higher prices, that would directly impact Japanese households.

With speculation growing that the House of Representatives will be dissolved and a general election held soon, many are calling for a new economic package.

LDP Secretary General Toshimitsu Motegi stressed the need to move policies forward without raising taxes.

At a policy speech event Thursday, he pledged to halt a proposed government plan to raise ¥1 trillion from higher taxes to finance expanded defense spending, and another ¥1 trillion through higher health insurance premiums to finance a measure tackling the declining birth rate.

Motegi expects that tax revenue from economic growth can be used as an alternative source of funds. However, it is not clear whether such revenue will be enough.

Former Chief Cabinet Secretary Katsunobu Kato has emphasized measures to expand social welfare, calling for “no school lunch fees, no child medical expenses and no childbirth expenses.”

At Thursday’s policy speech event, four of the nine candidates called for economic measures such as to deal with high prices.

Former economic security minister Takayuki Kobayashi pledged to craft an economic package by the end of this year. Former Environment Minister Shinjiro Koizumi has referred to plans to raise benefits for households receiving pensions and others.

The government expects Japan’s economy to fully recover from the pandemic and the central and local governments’ finances to return to a surplus in fiscal 2025.

If the new Cabinet formulates a large-scale economic package and compiles a supplementary budget, the government is unlikely to achieve its financial target.

Digital minister Taro Kono was the only candidate who clearly stated in his speech that fiscal discipline should be maintained.

“In times of crisis, we need to mobilize our finances, and in times of peace, we need to work to build up our financial reserves for [those other times],” he said.

Some candidates did not mention economic policies at the event.