Prime Minister Abe will direct ministers to draft economic policies worth 2 trillion yen by the end of the year after informing the Council on Economic and Fiscal Policy on September 25 of his intention to shift the use of the increased revenue from the consumption tax rate hike. The move is believed to support the lower house election’s signature campaign pledge of human resource development.
The spending on the new economic measure will be from FY2018. The three years after the start of consumption tax hike leading up to FY2020 will be defined as a period for productivity reform and focused investment to promote social security measures such as making preschool education free, reducing tuition for higher education, and eliminating day-care waiting lists, all of which will be paid by the increased revenue from the consumption tax rate hike from 8 percent to 10 percent in October 2019.
Abe is scheduled to share these policies in a press conference on Monday after announcing his intention to dissolve the House of Representatives for a general election to LDP and New Komeito senior officials in LDP’s extraordinary board meeting and coalition leaders’ meeting with the New Komeito’s Yamaguchi.
The prime minister is to indicate that the government’s goal of returning the primary fiscal balance to the black in fiscal 2020 is difficult to achieve, and that a delayed timeline to repay state debts will be set after careful consideration within the LDP.