Most of the parties challenging Prime Minister Shinzo Abe's ruling coalition in Sunday's Lower House election have tried to make a difference by calling for either freezing or canceling the planned consumption tax hike to 10 percent in 2019. Abe says his administration will proceed with the hike — after postponing it twice already — but will divert part of the revenue from the tax increase to education and other policy programs, instead of repaying government debt. At the same time, the prime minister is deemed to have left some room for once again postponing the hike, noting that the tax would be raised unless there is an economic crisis of the magnitude of the 2008 Lehman shock — a condition that he was also citing before he put off the hike to 2019 last year.
A consumption tax hike, however, is only one of the many components of an economic policy. Voters need to make a comprehensive judgment on the policies pitched by each of the parties during the campaign. They should also review the nearly five years of Abenomics and what changes it brought to the economy and their lives as they cast their ballots.
Since Abe returned to power in December 2012, Japan's economy is believed to be in the second-longest expansionary streak in the nation's postwar history. Gross domestic product has grown for six quarters in a row, the longest in 11 years. Aided by the yen's weakness — induced by the Bank of Japan's monetary easing — and robust overseas demand, major firms enjoy record profits. The Nikkei average on the Tokyo Stock Exchange more than doubled under Abe's watch to hit a 21-year high this week. The business confidence of major manufacturers in the latest Bank of Japan survey is on a 10-year high. The number of people on payrolls increased by more than 3 million, and the labor market is the tightest in decades amid an increasing manpower supply shortage.
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