Abe Announces Consumption Tax Hike Delay until Oct. 2019

Tokyo, June 1 (Jiji Press)--Japanese Prime Minister Shinzo Abe announced Wednesday that his government has decided to put off raising the consumption tax rate by two and a half years until October 2019. "I have decided to postpone the tax increase by 30 months," Abe said at a press conference held after the ordinary session of the Diet, Japan's parliament, ended the same day. On the reasons for the delay from April 2017, Abe pointed to concerns over sluggish global demand and a slowdown in global economic growth. "We need to prepare for risks," he said. He emphasized that despite the tax hike delay, the government will stick to its fiscal reconstruction goal of achieving a primary budget surplus in fiscal 2020. Abe said he will seek public judgement on his decision to put off the tax hike from the current 8 pct to 10 pct in the election for the House of Councillors, the upper chamber, to be held on July 10. The official campaign period will start on June 22. "Whether to accelerate or reverse Abenomics is the biggest issue in the upcoming election," he stressed. Abe said that in the Upper House election, he aims to win a majority of the contested seats for the LDP-Komeito ruling coalition. In the triennial election, half of the 242 Upper House seats are up for grabs. The prime minister said that his government will compile a comprehensive and bold economic stimulus package this autumn to boost his Abenomics economic policy mix. Earlier on Wednesday, Abe informed fellow lawmakers in his Liberal Democratic Party of his decision to delay the tax increase. He also held talks with Natsuo Yamaguchi, head of Komeito, and confirmed the postponement. At an extraordinary Diet session to be convened in autumn, the government and ruling camp plan to submit legislation aimed at resetting the timing of the tax hike to October 2019, according to Abe. With the tax hike set to be deferred, opposition parties are expected to strengthen their claims that Abenomics has failed. END