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| Japan's Abe calls snap election over consumption tax rise | Japan's Abe calls snap election over consumption tax rise |
| (about 4 hours later) | |
| TOKYO – Faced with a tanking economy and plummeting ratings, Prime Minister Shinzo Abe dissolved Japan’s House of Representatives on Tuesday and called a snap election in an attempt to revive his faltering leadership. | |
| The well-flagged move was officially explained as a referendum on Abe’s decision to delay a proposed but unpopular increase in the consumption tax. But many analysts believe Abe is trying to cut his political losses as his economic strategy flails — with the latest reports showing Japan slipping back into recession. | The well-flagged move was officially explained as a referendum on Abe’s decision to delay a proposed but unpopular increase in the consumption tax. But many analysts believe Abe is trying to cut his political losses as his economic strategy flails — with the latest reports showing Japan slipping back into recession. |
| “He’s in deep trouble,” said Jeff Kingston, director of Asian Studies at Temple University in Japan. “Calling an election now seems to be a bit of a gamble, but since his support ratings have cratered, perhaps it’s better to move sooner rather than later before they erode even further.” | “He’s in deep trouble,” said Jeff Kingston, director of Asian Studies at Temple University in Japan. “Calling an election now seems to be a bit of a gamble, but since his support ratings have cratered, perhaps it’s better to move sooner rather than later before they erode even further.” |
| A poll last week by NHK, the public broadcaster, found that support for Abe had dipped by eight points in a single month, to 44 percent. It is a far cry from the ratings in the 60s he enjoyed at the start of his tenure two years ago. | A poll last week by NHK, the public broadcaster, found that support for Abe had dipped by eight points in a single month, to 44 percent. It is a far cry from the ratings in the 60s he enjoyed at the start of his tenure two years ago. |
| In a televised news conference Tuesday night, Abe said he would dissolve the lower house on Friday and called an election for December, two years before it is due. His aides have named Dec. 14 as the most likely date. | |
| There is no question that Abe’s Liberal Democratic Party will return with a majority on December 14. The question is how much of a majority. | There is no question that Abe’s Liberal Democratic Party will return with a majority on December 14. The question is how much of a majority. |
| “In order for us to make sure Abenomics will succeed, I decided today that I will not raise the consumption tax to 10 percent in October next year as stated by law, but postpone it by 18 months,” a solemn-looking Abe said. “I'm making a grave decision that will affect the Japanese public's lives and the Japanese economy. . . . I must quickly seek a mandate from the public." | |
| The extra income from the tax had been designated for helping meet Japan's rapidly growing social security bills. On Monday, official statistics showed that the economy had fallen into a technical recession, shrinking for the second quarter in a row. | The extra income from the tax had been designated for helping meet Japan's rapidly growing social security bills. On Monday, official statistics showed that the economy had fallen into a technical recession, shrinking for the second quarter in a row. |
| The numbers were much worse than expected and made it inevitable that Abe would have to postpone the planned second increase in the tax. | The numbers were much worse than expected and made it inevitable that Abe would have to postpone the planned second increase in the tax. |
| The three-point increase in April, the first in 17 years, was blamed for causing the sudden slowdown and undermining Abe’s ambitious plans to revive the world’s third-largest economy. A second increase — a two-point hike to 10 percent planned for next October — would have been a body blow to the economy, analysts said. | |
| Abe said that the first increase had “weighed heavily on consumer spending.” | |
| “To raise the consumer tax by another 2 percent from next October will push down consumer spending again and could jeopardize our attempts to pull our economy out of deflation,” he said, announcing the 18-month delay. | |
| But he was adamant that the increase would take place in April 2017, saying that the country’s fiscal health required it. At 200 percent of GDP, Japan’s national debt is the highest in the developed world. | But he was adamant that the increase would take place in April 2017, saying that the country’s fiscal health required it. At 200 percent of GDP, Japan’s national debt is the highest in the developed world. |
| Peter Tasker, a veteran analyst of Japan’s economy and a supporter of the prime minister’s economic policies, said the recent data have taken the shine off Abe. | |
| “He can no longer walk on water as far as the public is concerned,” Tasker said. “He’s got to make his pitch to the public.” | “He can no longer walk on water as far as the public is concerned,” Tasker said. “He’s got to make his pitch to the public.” |
| Abe’s party currently has 294 of the 480 seats in the lower house, while its coalition partner, the Komeito, has 31. By contrast, the main opposition party, the Democratic Party of Japan, has only 54 seats and is widely considered to be in disarray. | |
| “He’s going to return to power with a majority,” said Koichi Nakano, a political scientist at Sophia University. “Perhaps it will be slightly reduced, but it will still be a majority.” | |
| Returning with a decent margin will give Abe a two-year reprieve to keep working on his agenda. And what an agenda it is. The legislative calendar is full of issues that would be contentious even in a time of economic vibrancy. | Returning with a decent margin will give Abe a two-year reprieve to keep working on his agenda. And what an agenda it is. The legislative calendar is full of issues that would be contentious even in a time of economic vibrancy. |
| But pushing through his planned changes in a time of economic malaise will be hard. His to-do list includes a controversial state secrets act, easing constraints on the military, restarting nuclear power plants shuttered since the March 2011 Fukushima disaster, and concluding negotiations on the Trans-Pacific Partnership free trade deal. | |
| “There’s just more bad news coming, so maybe he’s preempting that and catching the opposition while it’s in disarray,” Nakano said. | |
| If he fares reasonably well in this election, analysts say, Abe can expect to remain in power until 2018, no mean feat in a country that has gone through five prime ministers in the five years between Abe’s first and second tenures. |