The government approved a “Basic Policy on Economic and Fiscal Management and Reform (big-boned policy)” and three other plans at a cabinet meeting on June 15. The plans focus on measures to resolve the labor shortage, which is restricting economic growth. They also clarified their intention to work toward a scenario of achieving fiscal soundness through economic growth but avoided a steep reduction in government spending. The plans run the risk of loosening fiscal discipline.
A joint meeting of Council on Economic and Fiscal Policy and Council on Investments for the Future was held prior to the cabinet approval of the four plans. Prime Minister Shinzo Abe underscored that “It is urgently needed for the Japanese economy to secure human resources in terms of both quality and quantity and to boost its growth potential by improving productivity” amid growing concern over the labor shortage.
In the big-boned policy, the government expressed its concern that due to the increasingly serious labor shortage, “there is a risk of the sustainability of economic and social infrastructure being undermined.”
As ways to fix the problem, the government suggested expanding the employment of foreign workers, hiring senior citizens, and encouraging more women to enter the workforce.
Specifically, the government plans to subsidize private companies to develop wage and evaluation systems for enabling seniors to work actively. Also, the government will promote “trial employment” in a bid to urge companies to start employing seniors.
“The Basic Policy for Overcoming Population Decline and Vitalizing Local Economy” stipulated that financial assistance will be provided to people who move to regions that are facing declines in population to start businesses or find employment.
“The Investments for the Future Strategy,” a growth strategy, offered an array of measures that will lead to resolving the labor shortage. The strategy included the streamlining of the logistics industry, which is facing a serious shortage of truck drivers, and the planned launch of transportation services on public roads using driverless autonomous systems in 2020 to provide transportation for elderly and other people.
But the strategy fails to propose drastic measures and does not fully address the issue. Furthermore, domestic regulations are hindering the development of autonomous driving and other cutting-edge technologies. (Abridged)