Subsidy and Subsidy

As if saying “It’s the economy, stupid,” the leading party is focusing on policies for economic stimulus. Along with the decision of postponing consumption tax hike, Liberal Democratic Party and Komeito started deliberate discussion over supporting economic growth. That was the policy focused on application of lower tax rate for some commodities closely related to daily life. They go and back between taxation and reducing the burden of tax.

Having supporters mainly in lower and middle class families, Komeito took initiative for introducing reduced tax rate. It firmly required that lower tax rate at the time when consumption tax would be raised from 8% to 10% in April 2017. It is an obvious measure for luring its political supporters with an attractive campaign promise. However, there is a big problem to be solved until the introduction, which is how to select the commodity for the lowered tax rate.

Heading to the December election, both leading party are delivering indiscriminate stimulus policies for attracting the voters. To the middle and lower classes, they consider distributing “premium gift card” to encourage positive purchase. For eco-conscious housings, there will be money point. Subsidy for families with little kids will be increased.

Concerning negative trend of middle and small businesses in asset investment, the leading parties uphold subsidy for energy-saving investment. For the business in short of capital, they will supply needed money. Rice farmers will receive subsidy as the supplement for price down, the same policy Democratic Party of Japan had taken and LDP sharply criticized. Corporation that positively promotes woman workers will be

supported by another type of subsidy.

Those policies are the consequences of typical and old-fashioned way of LDP politics. This party has been subsidizing its supporters, which are represented by farmers, small business owners or construction firms. However, helping its supporters had not proven to be contributing economic growth of Japan as a whole. The campaign promises the voters can see are not something related to growth strategy in Abenomics, but discretional use of national budget for surviving the leading parties.

Since welfare has not been a field of LDP’s superiority, supporting policy for pension recipients will be cut, because it counted on introducing new tax rate next year. Once the budget resource has eliminated, LDP politics becomes cool for weak people.