Benefits for Election

Prime Minister Shigeru Ishiba announced that his Liberal Democratic Party and Komeito would include comprehensive benefits in their campaign policies for coming election of the Upper House in July. The benefits will be 20 thousand yen for every citizen, with additional 20 thousand yen for a family with low income or a small child, to support them suffering from price inflation. The opposition parties criticize Ishiba’s decision as populism with discretional spending of national budget.

After a meeting with LDP Secretary General, Hiroshi Moriyama, on June 13th, Ishiba revealed that he ordered Moriyama to consider delivering the allowance policy for the Upper House election. The leading coalition, the LDP and Komeito, had already decided to distribute 20 thousand yen of allowance to each individual and additional 20 thousand yen for the people whose income are as low as to be exempted from paying for resident tax. Ishiba added the benefit for the families with kids.

 

The opposition parties have been demanding Ishiba administration to introduce reduced rate of consumption tax or abolition of the tax . While the Constitutional Democratic Party of Japan (CDPJ) and Japan Innovation Party requested 0 percent of consumption tax for foods, the Democratic Party for the People hoped to halve consumption tax rate. Japan Communist Party argued temporary reduction of the rate before abolishing the tax, and Reiwa Shinsengumi demanded immediate abolition of consumption tax.

 

Ishiba has firmly opposed the idea of reducing consumption tax rate, reasoning that the tax supports social security as its financial resource. Representing interest of Ministry of Finance, Moriyama denied any possibility of consumption tax cut. However, the LDP and Komeito needed some alternative campaign policy to consumption tax cut upheld by the opposition parties.

 

It was the LDP administration which took advantage of consumption tax for different purposes from original ones. Consumption tax has been regarded as a resource for welfare in highly aged society. Its rate was raised from 5 percent to 8, and then to 10, in Shinzo Abe administration. Nevertheless, Abe decided in 2017 that the revenue of consumption tax could be used for supporting children in kindergarten, not aged people, to deal with low birth rate.

 

It is ironic that the LDP now insists on maintenance of consumption tax rate in the context of social security. In the Diet discussion of party leaders, the head of CDPJ, Yoshihiko Noda, who promoted consumption tax hike as a prime minister in 2012, explained his hard decision in requesting consumption tax cut. Ishiba showed his respect to Noda’s decision in 2012, insisting his opposition to consumption tax cut now. To the question of DPP leader, Yuichiro Tamaki, who blamed Ishiba of distribution of benefit for LDP’s election, Ishiba emotionally dismissed Tamaki’s argument as insulting.

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