Tokyo, Oct. 6 (Jiji Press)–Japanese Prime Minister Sanae Takaichi’s pursuit of “responsible and proactive public finances” face challenges as her plan to cut the consumption tax on food is a key focus of deliberations during a parliamentary session that opened Monday. Securing the necessary support from opposition parties for enacting the plan remains uncertain due to a lack of clarity by the Takaichi administration on its funding, estimated at about 10 trillion yen. Takaichi reiterated his determination to achieve a strong economy and fiscal sustainability in a parliamentary policy speech on Monday. “Now is the beginning of the first year of ‘responsible and proactive’ fiscal policy.” “We want to create as much leeway as possible in household finances. It is legislation for that,” she said of the tax cut plan. About 60 pct of her speech focused on the economy. Takaichi touted measures she took since she took office in October last year to cushion the impact of rising prices, including subsidies for electricity and gas bills. In her speech, the prime minister put priority on addressing public dissatisfaction with her administration’s policies, according to people familiar with the matter. In July, approval ratings for her cabinet fell in opinion polls. Her focus on a secondary capital plan during the previous parliamentary session led the public to think that Takaichi was “preoccupied with issues that are not directly linked to people’s lives,” said an official at her ruling Liberal Democratic Party. “The prime minister wanted to stress the importance of daily life in her speech,” a government official said. Opposition forces hold the key to enacting the consumption tax cut. While the LDP and its coalition partner, the Japan Innovation Party, hold three-quarters of seats in the House of Representatives, the lower chamber of parliament, they lack a majority in the Senate, previously called the House of Councillors, the upper chamber. In her speech, Takaichi called for opposition lawmakers to move forward together after almost all opposition parties had pushed for a consumption tax cut during the campaigning for the Lower House election in February. However, opposition parties are steadfast in rejecting the tax cut because Takaichi has not clarified how financial resources will be secured for the plan. “How is responsible and proactive fiscal policy different from lax fiscal policy?” said Junya Ogawa, leader of the opposition Democratic Reform Party. It is unclear whether the Takaichi administration can alleviate market concerns about the health of public finances. Although she promised to increase market confidence in the government, the 10-year government bond yield, the benchmark long-term interest rate, remains high, at above 3 pct. “It’s problematic not to show how to obtain the financial resources,” a senior LDP official said. Remarks by new agriculture minister Kazuo Yana suggesting that road budgets were drastically cut for municipalities whose leaders did not support him during the Lower House election have emerged as a source of contention. On Monday, Yana retracted his remarks and apologized. But opposition parties are poised to grill the Takaichi administration over his remarks. Some opposition lawmakers have called for his immediate resignation. END [Copyright The Jiji Press, Ltd.]
