Analysis by Japan's Asahi Shimbun
Ishiba: "We Will Pursue a Growth-Oriented Economy"
Expect Policies Emphasizing Distribution Such as Minimum Wage Increase
Japan's Asahi Shimbun reported on the 28th that the new cabinet economic policy led by Shigeru Ishiba, the newly elected leader of the ruling Liberal Democratic Party (LDP), is expected to largely inherit the current administration's policies under Fumio Kishida, with no major changes anticipated.
At a press conference on the 25th, Chairman Ishiba mentioned that he would work to more vigorously and firmly realize the "virtuous cycle of growth and distribution" promoted by the Kishida administration. He stated that he aims to pursue a "growth-type economy driven by wage increases and investment," adding, "I will continue what the Kishida administration has been addressing." Asahi viewed that the economic policies proposed by Chairman Ishiba included a list of policies emphasizing "distribution," such as raising the minimum wage and reviewing the tax system.
Chairman Ishiba plans to advance the timeline for raising the national average hourly minimum wage to 1,500 yen (approximately 14,000 won) from the mid-2030s, as proposed by the Kishida administration, to the 2020s. The national average minimum wage, which will be applied from October, is 1,055 yen (about 10,000 won), up 51 yen (about 470 won) from the previous year. In Japan, regional governments independently set their own minimum wages.
Asahi pointed out that the key issue is whether local small and medium-sized enterprises can cope if the minimum wage is raised sharply. Before his election, Chairman Ishiba mentioned strengthening taxation on financial income for the wealthy and increasing corporate taxes, and regarding income tax, he said, "There may probably be room to ask those who have the ability to bear the burden." He also did not oppose the tax increase policy decided by Prime Minister Kishida to partially finance defense capability enhancement, stating, "I want to consider it seriously."
Chairman Ishiba, whose electoral district is Tottori Prefecture, the least populous regional government in Japan, is also expected to accelerate the formulation of policies for regional revitalization. However, Asahi pointed out that although Prime Minister Kishida advocated reviewing taxation on financial income during the 2021 party leadership election, saying "there is no growth without distribution," he has not properly promoted distribution-centered policies since taking office. The newspaper stated, "Chairman Ishiba is said to have economic policy as a weakness compared to foreign and security policies," and "it remains to be seen to what extent he can realize the policies he proposed during the leadership election."
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