'Uncertain Funding' Sparks Public Outrage in Japan... Kishida's Support Rate on the Brink

Approval Rating at 30%, Lowest Since Inauguration
Uncertain Funding for Defense Costs and Low Birthrate
Public Opinion and Opposition Criticize as "Cunning Tax Increase"

Prime Minister Kishida Fumio took a gamble on regaining support through low birthrate and tax cut policies but faced fierce criticism for failing to present a proper funding plan. Amid public concerns over tax increases, approval ratings hit an all-time low, casting a red light on Kishida's path to reappointment.

Japanese Prime Minister Fumio Kishida [Photo by AFP]

On the 28th, Prime Minister Kishida Fumio attended the House of Councillors Budget Committee and stated his position on funding for low birthrate measures, saying, "We will ensure that (the public) does not bear any real additional burden." The Japanese government plans to implement a new low birthrate policy centered on expanding child allowances starting next year, estimating a budget requirement of 3.5 trillion yen annually for three years. The Kishida Cabinet decided to cover 1.1 trillion yen through social security cost reforms and 1 trillion yen through social insurance premium subsidies. They also plan to allocate an existing budget of 900 billion yen. Discussions on social security cost reforms are focusing on reducing medical and nursing care-related coverage expenses.

However, the plan to fund social insurance premium subsidies sparked controversy over tax increases. The Kishida Cabinet is considering adding subsidies for low birthrate funding to social insurance premiums, and public opinion effectively views this as the government imposing a tax hike. The opposition parties also criticized the Kishida Cabinet for pushing tax increases in a cunning manner. On the 22nd, Okada Katsuya, secretary-general of the Constitutional Democratic Party, pointed out at the House of Representatives Budget Committee that "the increased burden on the younger generation is nothing but a deception." Meanwhile, the Kishida Cabinet defends its position by arguing that if incomes rise due to wage increases and the amount of taxes collected through social security costs decreases, the overall tax burden on the public will not increase even if subsidies are collected.

However, the Cabinet failed to present concrete plans for funding defense spending and tax cuts. On that day, Prime Minister Kishida said, "The plan to increase the total defense budget to 43 trillion yen over five years starting this year remains unchanged," but did not specify a clear timing for tax increases. Meanwhile, the ruling Liberal Democratic Party proposed in this year's tax revision to raise corporate tax, income tax, and tobacco tax at an appropriate time after next year.

The Cabinet stated that it would secure funding for consumption tax cuts through increased tax revenues. However, the market criticized this claim as unrealistic. Finance Minister Suzuki Shunichi emphasized, "The increased tax revenues over the past two years have already been allocated to bond repayments," highlighting that new bond issuance would be necessary to implement tax cuts.

As the Kishida Cabinet failed to present a plan to secure funding, public dissatisfaction reached its peak. A public opinion poll conducted on the 27th by Nihon Keizai Shimbun and TV Tokyo targeting 869 adults nationwide showed that only 30% supported the Kishida Fumio Cabinet. This is the lowest approval rating since the Cabinet's inception. Additionally, 80% responded that the Cabinet has failed to provide adequate explanations regarding tax policies such as tax cuts.

In political circles, voices are emerging that the Kishida Cabinet is cornered. Following the consecutive resignations of three senior executives over the past three weeks and a controversy over inadequate political funding reports within the Liberal Democratic Party factions, the Kishida Cabinet continues to suffer a series of setbacks. With the tax increase issue now surfacing, analyses suggest that Prime Minister Kishida is facing a resignation crisis.

Nihon Keizai reported, "Prime Minister Kishida has not concretized funding for the administration's flagship policies on low birthrate and strengthening national defense," adding, "He appeals only to the effects of income tax reductions while avoiding explaining how much the public will have to bear."