Key economic policy stances of Japan’s next PM candidates By Reuters
(Reuters) – Candidates to become Japan’s next prime minister officially launched their campaigns on Friday, with popular vaccine minister Taro Kono expected to be the top contender to replace Yoshihide Suga.
Below are key economic policy stances of the candidates running in the ruling party’s leadership race:
Having served as minister in charge of deregulation, Kono calls for targeted spending on growth areas like renewable energy and expansion of 5G networks nationwide.
Kono spoke about the urgent need to close the gap of 22 trillion Japanese yen ($200billion in economic output), but he refused to discuss the details.
Kono condemned the “Abenomics”, policies of former premier Shinzo Abe for not bringing wealth to families and recommended tax incentives for companies who increase their wages.
Kono also resisted the bold monetary easing that was the first arrow of Abenomics, and called for clearer communication from the Bank of Japan regarding an exit strategy.
Recently, he has reversed his position and said that current monetary policy should remain flexible in view of the impact the pandemic is having on the economy.
Kono said that it would be difficult to maintain the BOJ’s goal of 2% inflation, and questioned whether it is possible to do so. Kono also stated that the central bank should communicate effectively with the markets about the direction of its monetary policy.
A former foreign minister with experience as a banker, Kishida had previously said if he were to become leader, fiscal consolidation would be a major pillar of policy.
In 2018, he expressed doubts about the BOJ’s ultra-loose monetary policy and said that it cannot sustain itself forever.
Kishida proposed spending packages of over 30 trillion Japanese yen, as the economy is suffering due to the pandemic.
In contrast to Abenomics, which focuses on corporate profits and hoping that the benefits eventually trickle down onto wage-earners, he stressed the importance of distributing more wealth to households.
A former internal affairs minister and a close associate of Abe, Takaichi has said she would carry over a remodelled version of Abenomics – making her policy proposal the most reflationist among the candidates.
Takaichi referred to her economic vision by the name “Sanaenomics” and said Japan should stop balancing its budget until the inflation target is met. So that fiscal as well as monetary policies can remain expansionary, Takaichi called it Sanaenomics.
Takaichi explained that Sanaenomics includes three pillars: fiscal spending, bold monetary ease and crisis-control investments. We’ll get all the help we can to reach our inflation goal of 2%.
Japan must issue more bonds as it doesn’t have to worry about defaulting its debt due to the central banks ability to continue printing money.
She stated in a policy speech that “the current ultra-low rate environment allows us to take bold (fiscal), measures.”
Seen as a long shot, Noda has offered few clues on her stance on economic policy including on whether Japan needs bolder fiscal and monetary support.
Noda made a policy speech stating that Japan needs to address a declining population. Japan’s consumer and worker pool is shrinking, which causes a “great blow” to its economy.
Noda stated that “we need a growth plan that puts children in the center” and suggested issuing “children bonds”, to help finance steps that will support child-bearing.
Noda stated that near-term priorities should include providing faster medical care for COVID-19 sufferers and financial assistance, such as blanket cash payouts to all Japan workers.
($1 = 109.8900 yen)