Japanese Prime Minister Fumio Kishida delivers his first policy speech during an extraordinary Diet session at the lower house of parliament on Oct 8, 2021 in Tokyo. (EUGENE HOSHIKO / AP)
TOKYO – Japan's new prime minister, Fumio Kishida, makes his debut in parliamentary questioning on Monday, the first chance for the opposition to probe Kishida's promises and plans since he took office last week.
Prime Minister Fumio Kishida said he will prioritise boosting wages through tax incentives, rather than imposing higher levies on capital gains and dividends to address Japan's income gap.
Kishida, facing opposition questions in parliament for the first time since becoming prime minister, also said a near-term priority would be to put the economy on a solid footing with bold monetary easing, flexible fiscal steps and a growth strategy.
"It's among options to create a virtuous cycle of growth and redistribution," Kishida told parliament, when asked by an opposition lawmaker about his earlier idea to raise capital gains tax.
"But there are other things we should do first such as reforming the tax system to achieve wage increases," Kishida said.
The government would start by overhauling corporate tax to help companies that are keen on raising wages, he said.
With the general election scheduled to take place in three weeks' time, tackling the next wave of the coronavirus pandemic and rebuilding a weak economy are set to become key issues of debate.
Although Japan is currently in the midst of a lull of new coronavirus infections, experts have warned of a likely increase in cases ahead of winter.
The main opposition party believes in expanding testing and has previously said Japan should stop lurching in and out of soft lockdowns.
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Kishida, on the other hand, has said the government will draw up a stimulus package running into the tens of trillions of yen to support those hit hard by the pandemic to aide post-coronavirus recovery.
Kishida has also touted a "new type of capitalism" that closes the wealth gap as a way to navigate the economy out of the doldrums
Kishida has also touted a "new type of capitalism" that closes the wealth gap as a way to navigate the economy out of the doldrums.
But the practicality of his promises may come under fire, given that he toned down his consideration of reviewing the country's taxes on capital gains and dividends as a way to redistribute wealth.
"I have no plan to touch the financial income tax for the time being … There are many other things to tackle first," Kishida told commercial broadcaster Fuji Television Network on Sunday.
The opposition could also question Kishida on his party's manifesto ahead of the Oct 31 general election. A draft obtained by Reuters showed the ruling Liberal Democratic Party wants to double the defence budget if possible.
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