RENGO Statements and Views

Regarding the Postponement of the Consumption Tax Rate Increase and the Announcement of the Dissolution of the Lower House

19 November 2014
Rikio Kozu, General Secretary
Japanese Trade Union Confederation (RENGO)
  1. On November 18, Prime Minister Shinzo Abe announced his intention to postpone the increase of Japan’s consumption tax rate to 10% until April 2017, and to dissolve the Lower House on November 21 and call a general election in order to gauge the public’s opinion regarding this decision. Having caused the collapse of the agreement among the Democratic Party of Japan (DPJ), Liberal Democratic Party and Komeito through his own policy mismanagement, Mr. Abe’s decision to expend an enormous amount of taxpayer funds in dissolving the Lower House and holding an election must be viewed with suspicion, as a prioritization of partisan interests. The reform of Japan’s social security system and the restoration of the nation’s finances to an even keel cannot be delayed, and the government bears an extremely heavy responsibility in creating a situation that can only set back the achievement of those goals.
  2. RENGO participated in the public hearing concerning future trends in economic and fiscal policy held by the government on November 4, and indicated the reform and stabilization of the social security system, the prioritization of policy designed to support and raise the standard of living of citizens, the immediate abandonment of moves towards changes that will negatively affect rules concerning the protection of workers, and a reduction in the number of seats in the Diet as among issues that should be addressed by the government as soon as possible. It is the fundamental responsibility of the government and the ruling parties to give attention to these issues, and their decision to dissolve the House and hold a meaningless election while they remain neglected represents the grossest abdication of that responsibility.
  3. At his press conference, Prime Minister Abe acknowledged the fact that the preliminary figures for GDP from July to September show that the economy has not recovered a growth trajectory, and indicated as his reason for deciding to call an election concerns that a 2% increase in the consumption tax rate in October next year, as originally scheduled, would once again reduce personal consumption and endanger the nation’s escape from deflation. These facts make it impossible to hide the failure of Abenomics, which relies on the concept of the trickle-down effect, a virtuous economic cycle in which the benefits of a weak yen and high share prices to large corporations and the wealthy flow back to the real economy. The economic situation that produced Prime Minister Abe’s decision to delay the increase of the consumption tax rate to 10% is a natural consequence of the failure of his policies, and it is doubtful that he would receive the support of the public even if he were to raise the tax as planned.
  4. The goal of RENGO is the development of “a secure society based on work”. In order to advance policies that promote security and stability in the personal and working lives of all Japanese citizens, it will be essential for the DPJ to recover the trust of the public and to once again establish a system for the formulation of policy based on the perspective of ordinary citizens and workers. All the members of the RENGO are of one mind in their resolution to spare no effort in contesting the forthcoming Lower House election.