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Japan ruling LDP offers proposals for Kishida's economic package, but no income tax cuts

Published 10/17/2023, 03:33 AM
Updated 10/17/2023, 03:35 AM
© Reuters. FILE PHOTO: Japan's Prime Minister Fumio Kishida speaks at a press conference in Tokyo, Japan, August 4, 2023. REUTERS/Kim Kyung-Hoon/Pool/File photo
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TOKYO (Reuters) - Lawmakers from Japan's ruling Liberal Democratic Party (LDP) gave a list of proposals to Prime Minister Fumio Kishida's cabinet for possible inclusion in an economic package to help people cope with rising living costs.

While the measures proposed were broadly aimed at fostering economic growth, they did not include income tax cuts, which some LDP lawmakers had favoured, but there was room for cash payouts to low income households.

The size and content of the extra budget remains unclear, although LDP upper house heavyweight Hiroshige Seko has called for a package of around 15 trillion to 20 trillion yen.

But the government's room for manouevre is limited as Japan has the industrial world's heaviest debt, and a supplementary budget of that size would make it even harder to meet a target to balance the primary budget, excluding new bond sales and debt servicing costs, by fiscal 2025.

© Reuters. FILE PHOTO: Japan's Prime Minister Fumio Kishida speaks at a press conference in Tokyo, Japan, August 4, 2023. REUTERS/Kim Kyung-Hoon/Pool/File photo

Kishida announced plans several weeks ago to compile the package, which would be aimed at protecting people from cost-push inflation, backing sustainable wage and income growth, promoting domestic investment, addressing demographic change and encourage infrastructure investment.

LDP lawmakers hope that the new economic package will boost support among voters, with speculation that Kishida could call a snap election before one falls due in late 2025.

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