Biz Leaders Seek Decisive Action by Abe’s New Cabinet

October 3, 2018

Tokyo- Japanese business leaders on Tuesday urged the new cabinet of Prime Minister Shinzo Abe to decisively tackle economic challenges facing the country.

"I want the Abe government to raise the consumption tax rate to 10 pct without fail" in October 2019 as planned, Hiroaki Nakanishi, head of the Japan Business Federation, or Keidanren, told reporters.

The hike "can't be helped," in view of sales tax rate levels in other countries, he noted.

After the consumption tax rate was increased to 8 pct from 5 pct in April 2014, the hike to 10 pct, initially planned for October 2015, has been postponed twice due to worries about major economic impacts.

Meanwhile, Nakanishi pinned high hopes on the leadership of Abe, who has remained in power for nearly six years since returning as prime minister in December 2012. "It's important to make the Japanese economy strong again," the Keidanren chief said.

"I hope that the Abe administration will step up efforts to dispel anxieties" among young generations, Yoshimitsu Kobayashi, leader of the Japan Association of Corporate Executives, or Keizai Doyukai, said in a statement, apparently calling on the new Abe cabinet, launched Tuesday, to accelerate the reform of the nation's social security system.

"I want the Abe cabinet to face the public with a sense of tension," he said, adding that the prime minister should manage his government sincerely.

Akio Mimura, leader of the Japan Chamber of Commerce and Industry, called on the Abe administration to work on an array of challenges "urgently and intensively."

Private-sector economists also pointed to a barrage of issues facing Abe's administration.

While noting that Abe is expected to keep intact economic stimulus and other key steps in his Abenomics policy package, Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management Co., said that among major challenges are the planned consumption tax rate hike and the compilation of a supplementary budget to finance reconstruction measures in the wake of a series of natural disasters that have hit Japan recently.

Ryutaro Kono, chief economist at BNP Paribas Securities (Japan) Ltd., pointed out that social security costs in Japan are set to balloon as many of the baby boomers in the country will be 75 or older in 2022-2024.

Working out measures to make the social security system sustainable and passing the baton to the next administration is a duty of the Abe cabinet, he said. Jiji Press