Japan’s extraordinary Diet session began on Monday, with Prime Minister Shinzo Abe and the ruling LDP laying out their agenda for the coming months. The government has so far put its economic policies at the forefront, perhaps seeking to minimalize its less popular attempts to normalize the military as economic pressure builds after April’s consumption tax increase. Improving the economy will be especially important this session, as Abe is set to decide on whether to follow through on the next tax increase, slated for late 2015, by the end of the Diet session in early December.
Abe attempted to set expectations before the session began earlier in September, when he said he was neutral about whether to go ahead with the next tax hike. While answering questions about the prospective increase, Abe said “Japan will spend about 20 percent of the additional consumption tax revenue to bolster its social security system,” according to the Jiji Press. He further said “We must avoid, by all means, a situation in which the economy is dampened by a tax increase while tax revenue doesn’t grow.” Abe can be expected to withhold a strong push for the next tax increase until third quarter growth figures are released, at which point he will likely decide if the tax hike is feasible, and whether to work with the Bank of Japan to initiate another stimulus package.
Another key plank of the government’s agenda this fall will be local revitalization. Considered an important part of his “third arrow” of economic structural reform, Abe said “We will draw up and implement bold measures that are totally different from steps taken in the past.” In the past, the government has injected large amounts of money into infrastructure projects as an attempt to improve connectivity and hopefully facilitate the movement of people away from major population centers. The government now says it plans to work with individual communities to develop specific strategies. The government has adopted two bills on the issue already this session, with the goal of having a comprehensive five year strategy to combat depopulation in rural areas by the end of the session.
The government also hopes to pass legislation that will legalize casinos, and adopt a bill that will “remove the current three-year limit on dispatching temporary workers to the same job, enabling companies to continue using such staff for much longer instead of hiring full-time employees,” according to the Japan Times. The policy is seen as detrimental to Abe’s goal of improving the position of women in the workforce, as they constitute a majority of contract employees.
The last piece of the domestic agenda focused on that same issue of women in the labor market. Abe said his government would foster a nationwide campaign, introducing a system in which companies could be obligated “to disclose how many female executives they had,” with the goal of reaching 30 percent of female executives nationwide by 2030. A government panel recommended on Tuesday “that companies with at least 301 employees will be required to compile and disclose such action plans,” in order to meet the government’s target. However, it stopped short of recommending an obligation that companies set quotas for women, saying “the realities of each company should be taken into account.”
While economic policy featured prominently, a large part of Abe’s speech targeted better regional relations, with the prime minister saying he hoped to hold bilateral summits with both Chinese and South Korean leaders “at an early date,” referring to the upcoming APEC summit in Beijing this November. He specifically called South Korea Japan’s “most important neighbor,” and that “we will continue steady efforts to improve our country’s relations with South Korea.” Little to no official mention was made of the government’s new stance on collective self-defense. The LDP has postponed all security related bills until the regular Diet session next year, with a government source saying “challenges will be dealt with thoroughly in the ordinary session.”
It appears the Abe government has decided to sideline the collective self-defense issue until after it has made a decision on the next tax increase. An aide to Abe told the press he wants to “make efforts to solidify the foundation of the administration,” which was built upon the success of his economic policy. A source within the LDP who spoke with the Japan News said the government views the extraordinary session as “a time to defend,” most likely in the hope that an improving economy will facilitate the tax increase, and create enough popular support to codify the government’s reinterpretation of Japan’s pacifist constitution by next year.