Japan’s ruling Liberal Democratic Party will enact “bold” tax breaks for corporate investment, according to a policy platform unveiled today ahead of an upper house election that opinion polls suggest it will win.
“Japan’s corporate taxes are extremely high in comparison with other countries,” Sanae Takaichi, chairwoman of the party’s Policy Research Council, told reporters. “I want to create the environment to cut corporate tax.”
The party reiterated pledges to aim for 3 percent average nominal economic growth and 2 percent real growth over the next 10 years. It aims to halve the primary budget deficit by fiscal 2014 and reach a primary balance by fiscal 2020, according to the document.
Media polls show Prime Minister Shinzo Abe’s LDP is on track to win a vote expected on July 21, after a landslide victory in the election to the more powerful lower house in December. Surveys show voters have high expectations for his economic policies, with the Nikkei 225 Stock Average up about 29 percent since he took office on Dec. 26 last year.
In a survey published by the Yomiuri newspaper on June 11, 44 percent of respondents said they planned to vote for the LDP in the proportional representation section of the election, compared with 7 percent for the Democratic Party, the second-most popular option. The paper polled 998 people by phone and did not give a margin of error.
Abe and his ministers say the LDP’s growth plan, based on unprecedented monetary easing, fiscal stimulus and a strategy to encourage investment, is working. Gross domestic product rose an annualized 4.1 percent in January-March, compared with 1.2 percent in the previous quarter.
The party also said it would consider measures to help people and industries affected by the weakening of the yen. The yen has fallen against every major currency since mid-November.
The LDP said the government is working closely with the Bank of Japan toward achieving its 2 percent inflation target. On nuclear power, the party said it would try to persuade local residents to allow restarting reactors judged safe by the Nuclear Regulatory Commission, following the Fukushima disaster of March 2011.
The party vowed to strengthen the country’s armed forces and secure necessary technologies and production facilities. On the question of territorial disputes, it said it would seek to spread Japan’s views.
Japan is engaged in separate disputes with China and South Korea over the ownership of two groups of tiny islets.