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No “centerpiece” toward 2% growth

  • 2015-07-01 15:00:00
  • , Asahi
  • Translation

(Asahi: July 1, 2015 – p.3)


 About 190 pages covers the main text alone of the growth strategy adopted by the Cabinet , which is 1.5 times longer than that of last year’s and twice as long as that of FY 2013’s. Compared to last year’s strategy which had such centerpieces as lowering the corporate tax and advocating a reform of agricultural cooperatives, it is undeniable that “the announced strategy lacks magnificence” (an official close to the prime minister). When the Cabinet decided on the growth strategy last year, Prime Minister Abe himself met the press conference but he did not this year.


 An official of the Cabinet Secretariat explained: “The growth strategy this time focuses on steadfastly achieving the objectives proposed so far. It’s unflashy, but there’s no help for it.”


 However, looking back on measures incorporated into the past strategy reveals that some of the measures are still left outstanding. Last year’s “centerpiece,” which featured the bills for the agricultural cooperatives reform and the bills for labor-related fields, are in the process of deliberation during the current Diet session. Amid the confrontation between the ruling and opposition parties over the security legislation, the government reportedly avoided launching another controversial reform which may stagnate the ongoing deliberation on the priority bills.


 There was “a miscalculation” too. An official close to the prime minister said, “Although the government wanted to include some message that the Trans-Pacific Partnership (TPP) agreement will lead to the growth of small and medium-sized businesses,” it was unable to include some outcome of the expected TPP conclusion on account of political conflicts in the U.S. Congress. The government also planned to positively appeal to the public on the merit of “my number” (a system of common numbers for taxation and social security) that will begin in January 2016, but due to the information leakage from the Japan Pension Service, the administration became unable to push forward.


 With monetary easing by the Bank of Japan, corporate profits are still in good shape, maintaining the Nikkei stock average index at around 20,000 yen. As the House of Councilors election is scheduled for next year, a momentum for implementing a reform that will require great hardship has not risen until the last moment.


 Hideo Kumano of Dai-Ichi Life Research Institute says: “I think it is difficult for the growth strategy this time to realize 2% growth in real terms. The government should have deepened one step further an idea of the growth strategy by looking at what things will be like two to three years later.”

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