Takaichi Promises Tax Cuts and Cash Payouts in LDP Leadership Bid

Sanae Takaichi, a key contender for the leadership of Japan’s ruling Liberal Democratic Party (LDP), has announced plans for tax cuts and cash payouts to households if she wins the party’s leadership election on October 4, 2023. During a press conference on Friday, Takaichi expressed her ambition to reestablish Japan as a global leader, emphasizing that economic strength is pivotal for the nation’s future. “I stand here with high aspirations to once again put Japan at the top of the world,” she stated.

Takaichi, a conservative who narrowly lost to outgoing Prime Minister Shigeru Ishiba in a previous leadership contest, has consistently advocated for aggressive economic stimulus to enhance growth. Her current policy proposals mirror those she presented last year, focusing on measures to stimulate the economy and strengthen Japan’s resilience against security challenges and supply chain issues.

Among her proposed initiatives are increasing the threshold for untaxed income, removing gasoline taxes, and improving national self-sufficiency in energy and food supplies. Although she previously suggested reducing the consumption tax on food, she tempered her stance recently, indicating that such a move would not deliver immediate relief from rising prices. Takaichi has also shown support for a stronger military but refrained from specifying any defense spending targets during her remarks.

As she aims to broaden her appeal within the party, Takaichi’s policies indicate a strategic approach to governance. Given the LDP’s current coalition lacks a majority in both chambers of parliament, her ability to collaborate with a diverse range of politicians will be crucial if she assumes leadership.

Financial analysts are watching her stance on monetary policy closely, particularly following her comments last year that it would be “stupid” for the Bank of Japan (BOJ) to increase interest rates. However, in her recent statements, she did not address BOJ policy. Just prior to her press conference, the BOJ decided to maintain its benchmark interest rate while starting to gradually reduce its substantial exchange-traded fund holdings, marking a shift from its previous ultra-easy monetary policy.

Takaichi, who once served as Japan’s Minister for Economic Security, is among the frontrunners in the LDP leadership race, competing against figures such as Agriculture Minister Shinjiro Koizumi. A recent poll conducted by Jiji News from September 12-15 revealed that 19.7% of LDP supporters considered Takaichi the most suitable candidate, placing her second behind Koizumi, who garnered 31.8% of support.

The LDP leadership vote is exclusive to LDP lawmakers and the party’s approximately 1 million rank-and-file members. If Takaichi wins, she stands a strong chance of becoming Japan’s first female prime minister, a position determined by parliamentary vote. She has cited former UK Prime Minister Margaret Thatcher as a significant influence on her political philosophy, and her leadership could further shift the LDP to the right.

In light of growing competition from smaller right-leaning parties, notably the Sanseito party, which performed strongly in recent elections, Takaichi has proposed stricter controls on foreigners living in Japan. “I will look into measures to deal with illegal residents and review land acquisition regulations,” she said, reflecting the concerns raised by the Sanseito party.

At 64 years old, Takaichi expressed a desire to be a more active national leader if elected. “Who’s keeping the government plane tied down on the ground? If I had the chance, I’d use it to visit other countries at least once a month,” she remarked, highlighting her proactive vision for Japan’s international engagement.

Other candidates vying for the LDP leadership position include Foreign Minister Toshimitsu Motegi, Chief Cabinet Secretary Yoshimasa Hayashi, and younger right-wing candidate Takayuki Kobayashi. As the leadership election approaches, Takaichi’s bold proposals may reshape the political landscape in Japan, marking a significant moment in the nation’s governance.