Prime Minister Shinzo Abe is set to announce on Wednesday his plan to postpone the consumption tax hike scheduled for next April. Wednesday is the final day of the current Diet session.
On Tuesday, the ruling coalition of the Liberal Democratic Party and Komeito approved Abe’s plan to delay the tax increase from 8 percent to 10 percent by 2-and-a-half years, to October 2019. The government had initially planned to raise the tax in October 2015, but Abe postponed the hike by one-and-a-half years, to April 2017.
Abe is to explain at a news conference that at last week’s Ise-Shima summit, the Group of Seven leaders shared a sense of crisis about the global economy, and Japan needs to mobilize all possible measures to contribute to global economic growth.
He is also likely to emphasize that another postponement is needed to pull the country out of deflation amid sluggish consumer spending.
Abe is expected to seek the public’s judgment on his plan in this summer’s Upper House election.
Concerns have been expressed over the possible impact the delay could have on plans to expand social security programs and efforts to restore fiscal health. Attention is focused on whether Abe will be able to show a clear roadmap for overcoming these challenges.
On Tuesday, 4 opposition parties jointly submitted a no-confidence motion against the Abe Cabinet to the Lower House. They argue that the postponement shows the failure of Abe’s economic policy, known as Abenomics.
Lower House members rejected the motion by a majority.
Source and image: NHK