Ishiba's Departure to Result in Longer Economic Policy Stagnation
Tokyo, Sept. 8 (Jiji Press)--In the wake of Japanese Prime Minister Shigeru Ishiba's decision to step down, the country's economic policies are likely to remain stalled for an extended period.
The confusion within the ruling Liberal Democratic Party over whether Ishiba, also LDP president, should resign or not has already created a political vacuum, and it will be difficult to advance important policies before a new administration is launched after the election of a new LDP leader to replace Ishiba, political watchers said.
The compilation of economic measures aimed at mitigating the impact of high U.S. tariffs and addressing higher prices at home is likely to be delayed substantially, they said.
At a press conference Sunday, Ishiba announced his decision to step down, after the LDP and its coalition partner, Komeito, lost their combined majority in the House of Councillors in the July 20 election for the upper chamber of the Diet, Japan's parliament. The coalition lost its control of the House of Representatives, the lower chamber, in last October's general election.
On Friday, Ishiba said that the government plans to draw up economic measures this autumn, showing his eagerness to hold policy talks with opposition parties.
During their Upper House election campaigning, the LDP and Komeito pledged to grant 20,000 to 40,000 yen in handout per person. But the opposition side has expressed objections to the measure.
The ruling coalition, now short of majority in both chambers of the Diet, will be unable to enact a supplementary budget to finance economic measures without cooperation from opposition parties.
But LDP Policy Research Council chief Itsunori Onodera has already offered to resign from the post to take responsibility for the July election fiasco, and policy coordination between the ruling and opposition sides has been stalled as a result, according to an official at an economy-related government agency.
Over the envisaged abolition of the existing temporary gasoline tax surcharges, working-level discussions that started on Aug. 1 between the ruling pair and four opposition parties have hit a snag due to wide gaps regarding alternative revenue sources.
In addition, details need to be worked out for a plan to make high school education free of charge starting in fiscal 2026.
A government official expressed concern, saying that "we would be unable to secure enough time to consider important policies as part of preparations to compile the government's (fiscal 2026) budget and adopt tax system reform measures (for the same fiscal year)" if the political vacuum continues.
END
