Abe, Yamaguchi mull strategy

Abe, Yamaguchi mull strategy

Emerging victorious from Sunday's House of Councillors election, Prime Minister Shinzo Abe and New Komeito leader Natsuo Yamaguchi met on Monday to discuss immediate strategy for the ruling coalition, the beginning of efforts that could eventually halt the notorious revolving door of Japanese prime ministers.

The two ruling parties recaptured a majority of seats in the upper house, ending the so-called divided Diet in which the governing parties do not control the upper chamber. Controlling both houses provides a foothold for Abe to stay in power for an extended period at a time when there is no national election scheduled for the next three years.

Abe aims to put the Japanese economy on a stable growth path through his Abenomics policies before tackling his other priority issues, including constitutional revisions.

"We've concentrated on this upper house election for more than six months," Abe said at a meeting of Liberal Democratic Party executives Monday morning. "We've put an end to the divided Diet and secured a stable majority in the upper house. Now the ball is in the LDP's court. I want us to be united to turn out good results."

Chief Cabinet Secretary Yoshihide Suga echoed Abe's sentiment. "We'll do our best to let the Japanese people feel the impact of an economic recovery," Suga said at a press conference in the morning.

Suga, however, was noncommital about a Cabinet reshuffle. "Nothing has been decided," he said. "The prime minister has the exclusive right to make personnel appointments. He'll take a summer vacation and have a lot of time to think about it."

Meanwhile, Komeito's Yamaguchi expressed caution about raising the consumption tax rate next year. "A tax hike places downward pressures on the economy," Yamaguchi said during a TBS programme in the morning. "If our economy can't endure these pressures, we shouldn't raise it now. We should make a final decision after thorough examinations to determine if the economy has the vigour and foundation it needs to endure [the pressures]."

Abe is expected to make a decision on raising the consumption tax rate to 8 per cent by the end of October.

Officials of the Finance Ministry and other government entities are calling for a hike in the consumption tax next April even though some of Abe's economic advisers favour postponing the increase.

The government hopes to convene an extraordinary Diet session in autumn to gain approval for a new set of measures, including tax breaks for investment, to strengthen Japan's industrial competitiveness. The measures are designed to supplement the growth strategy announced in June as part of Abenomics.

Abe intends to have the LDP's Tax System Research Commission start discussions on tax breaks for investment earlier than scheduled so it can compile outlines for tax system reforms in time for submitting a set of bills for industrial competitiveness to the Diet.

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