Takaichi Touts Tax Cuts, Cash Payouts in Japan Ruling Party Race

Sanae Takaichi Photographer: Toru Hanai/Bloomberg Photo by Toru Hanai /Bloomberg

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(Bloomberg) — Sanae Takaichi, one of the leading candidates to become the next head of Japan’s ruling party, said Friday she would roll out tax benefits and make cash payouts to households if she wins the party’s Oct. 4 leadership election.

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“I stand here with high aspirations to once again put Japan at the top of the world,” Takaichi said. “The key is economic strength, and I will pursue economic growth to the fullest extent I can.”

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Takaichi, a staunch conservative who narrowly lost to outgoing Prime Minister Shigeru Ishiba in a leadership contest for the Liberal Democratic Party about a year ago, has long been an advocate of aggressive economic stimulus to boost growth. Her policy platform for this year’s election is similar to the one she campaigned on last year, featuring pump-priming measures and proposals to bolster Japan’s resilience to security and supply-chain threats.

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Her proposals include raising the threshold for untaxed income and eliminating gasoline taxes, as well as increasing national self-sufficiency in energy and food supplies. She had previously raised the option of cutting the consumption tax on food, but on Friday she was more cautious, saying the measure would not provide immediate price relief. And while an advocate of a stronger military, she declined to provide any specific defense spending targets.

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Taken together, her policies appeared to show she’s looking past the contest for the LDP’s leadership with an appeal to a broad spectrum of politicians with whom she might need to collaborate should she win, given the ruling coalition’s lack of a majority in either chamber of parliament.

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Financial market participants have been focused on her views on monetary policy after she said during a debate a year ago that it would be “stupid” for the Bank of Japan to raise interest rates. However, in a statement about her policies and a subsequent 90-minute press conference on Friday she didn’t touch on BOJ policy. 

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Shortly before she spoke to the press, the BOJ board voted to hold its benchmark interest rate steady but decided to start gradually offloading the bank’s massive exchange-traded fund holdings in another move away from its ultra-easy policy stance of years past.

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Takaichi, who once served as Japan’s economic security minister, is one of the front-runners in the race to lead the LDP alongside Agriculture Minister Shinjiro Koizumi, a reform proponent who is the son of former prime minister Junichiro Koizumi. Ishiba recently said he would step down after the LDP-led ruling coalition sustained another election setback that left it without majorities in either house of parliament.

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A Jiji News poll conducted Sept. 12-15 showed that 19.7% of those polled who were also LDP supporters thought Takaichi was the most suitable candidate to lead the party. She came second in the survey, behind Koizumi at 31.8%. The leadership vote is only open to LDP lawmakers and the party’s 1 million or so rank-and-file party members nationwide.