Prime Minister Shinzo Abe pledged to create a virtuous circle of higher employment and spending and to boost Japan’s role in global security, while giving few details on measures to spur investment and competitiveness.
Abe’s speech at the opening of the Japanese parliament marks the start of what he has dubbed the “session for getting things done,” after his ruling coalition won the July upper house election, ridding him of the handicap of a hung parliament. The session runs to Dec. 6.
Abe said he aimed to boost employment and raise wages, creating a “virtuous circle” that spurs consumption and investment, according to a copy of his speech distributed to reporters in advance. He would deepen links between politics, labor and capital in a bid to realize this goal, he said.
“He has to get things done and he’s aware of this,” said Steven Reed, a professor of political science at Chuo University in Tokyo. “That’s what’s different from the past,” he said, adding that previous prime ministers from Abe’s Liberal Democratic Party had often backed off their ideas.
Speaking to lawmakers in Tokyo, Abe said the effects of the first two of his “three arrows” of economic policy -- monetary easing and fiscal stimulus -- had yet to reach some parts of the country. “The escape from deflation is only part-way along,” he said. “We must continue along this path.”
To sustain Japan’s recovery, Abe should seek to boost competitiveness by cutting corporate taxes, revamping rigid labor markets and restraining social spending, economists including Robert Feldman, head of Japan economic research at Morgan Stanley MUFG Securities Co., have said.
Japan’s economy grew an annualized 3.8 percent in the second quarter and Abe’s bid to end two decades of stagnation and deflation have led the Topix index to gain more than 39 percent this year, making Japan the world’s best-performing major stock market. The index closed little changed today at 1,197.47.
“It all depends on how much detail comes out of the debate in parliament,” said Takao Hattori, senior investment strategist, at Mitsubishi UFJ Morgan Stanley Securities Co. Ltd., who said there weren’t any new ideas in the speech. “Business leaders want to see specific measures that will make them feel more optimistic.”
The government submitted three bills today: one on improving industrial competitiveness intended to support mergers and new ventures, one on restructuring the power industry that had been abandoned during the last parliamentary session and a third on social security.
“There have been many similar growth strategies in the past,” Abe told lawmakers. “The difference is whether it is carried through or not.”
On national security, Abe said Japan should be proud of its 68 years as a nation of peace. “We must take action now to ensure that we can defend that peace in the future,” he said. He reiterated he would create a National Security Council to strengthen the command function of the prime minister’s office in defense and foreign policy.
Abe added that he aimed to deepen public debate on modifying Japan’s pacifist constitution, without mentioning plans he has previously discussed for changing its interpretation to allow Japan to defend its allies. Abe’s coalition partner, the Buddhist-backed New Komeito, has not backed the idea.
Abe said the government would take the lead in dealing with the crisis over contaminated water leaks from the crippled Fukushima nuclear plant, rather than leaving the task up to Tokyo Electric Power Co., the company that operated the site.