(Mainichi: February 18, 2016 – p. 6)
The Mainichi Shimbun and other media outlets interviewed Minister in Charge of Economic Revitalization Nobuteru Ishihara on Feb. 17. Amid the heightened sense of uncertainty about the future of the global economy, Ishihara said regarding the possibility of postponing for a second time an increase in the consumption tax to 10%, “The government will make an appropriate and timely judgment, depending on the given situation.”
Ishihara took office in January following the resignation of his predecessor, Akira Amari. The volatility in global financial markets beginning early this year have caused appreciation of the yen and driven down stock prices. As a result, the gross domestic product (GDP) for the October-December period last year announced on Feb. 15 recorded negative growth for the first time in two quarters. “The clause (stating that implementation of the consumption tax increase should depend on the economy) will not be applied,” Ishihara said regarding the consumption tax increase scheduled for April next year. “In the event of a major unexpected event such as the Lehman shock or the East Japan Great Earthquake, the government will make a decision (taking such circumstances into consideration).”
“In order to pass social security to the next generation, a tax increase is necessary as a special-purpose tax for social welfare,” said Ishihara, presenting his view on the tax increase. He emphasized, “The tax increase is also necessary to maintain the international community’s trust in Japan as a country that adheres to fiscal discipline.”
As for the necessity of economic measures including fiscal stimulus, Ishihara said, “We will implement the fiscal 2015 supplementary budget (passed at the end of January) as soon as possible.” The minister continued: “We will also try to pass as quickly as possible the fiscal 2016 budget bill currently under Diet deliberation; thereby, money needed by local governments can be distributed across the country.” Ishihara avoided making a specific comment on whether additional measures will be needed.
Regarding the negative interest rate policy by the Bank of Japan, the minister rated the policy as “a strong message toward ending deflation.” In order to determine the impact of the policy on households, corporations, and the financial system, Ishihara expressed his intention to have his ministry interview financial institutions, borrowers, and depositors.