LDP Candidates Should Talk About Growth Strategy, Not Just Temporary Relief

The Liberal Democratic Party (LDP) presidential election has given candidates a chance to focus on economic policies, including measures to combat rising prices. However, the LDP's proposal for uniform benefits ー floated in the July Upper House election ー has become a fast-fading memory. Meanwhile, attention has shifted to measures like tax cuts that reduce the burden on households.

Overall, the candidates' policy positions show few distinctive elements likely to spark controversy. Additionally, they appear to be prioritizing compromise with the opposition and harmony within the party. However, can such an approach really restore the LDP's strength?

Competing in terms of measures to soften the burden on households will be insufficient. If the LDP truly takes pride in being a responsible political party, it should develop a growth strategy. It should show how it will restore a strong economy, despite headwinds such as rising prices and the United States' tariffs imposed by President Donald Trump. We would like to see more in-depth discussion on specific and effective approaches to achieve that objective.

Positions on the Issues

All the candidates have been cautious about the consumption tax cuts demanded by opposition parties. However, all five candidates are willing to abolish the temporary gasoline tax rate. That measure was previously agreed to by the ruling and opposition parties.

Shinjiro Koizumi (left) and Sanae Takaichi.

The Democratic Party for the People has advocated raising the "annual income wall" for tax breaks and benefits. Minister of Economic Security Sanae Takaichi supports the idea. Shinjiro Koizumi, the Minister of Agriculture, Forestry and Fisheries, has also called for reviewing the proposal.

On another front, Takaichi is advocating for tax deductions with benefits. Her approach combines income tax cuts and benefits, overlapping with that of the Constitutional Democratic Party of Japan.

As a minority ruling party, the LDP has no recourse but to listen to the voices of the opposition parties. However, the LDP has traditionally rejected the opposition's demands related to matters such as revenue sources. If they are now changing that tradition, the LDP should provide specific details of their proposed system. Those should be convincing and include funding sources.

Income Tax Positions

In addition, former Minister of Economy, Trade and Industry Takayuki Kobayashi has called for a temporary fixed-rate reduction in the income tax.

Chief Cabinet Secretary Yoshimasa Hayashi has proposed the creation of a "universal credit for Japan." His proposal would provide benefits to low- and middle-income earners.

Finally, former Secretary-General Toshimitsu Motegi has pledged to allocate trillions of Japanese yen (billions of US dollars) in special local grants to support people in their daily lives.

What to Do About Rising Prices

It is understandable that each candidate should be competing to promise support for households struggling with rising prices.

*From left: Takayuki Kobayashi, Toshimitsu Motegi, Yoshimasa Hayashi, Sanae Takaichi, and Shinjiro Koizumi, at LDP headquarters in Nagatacho, Tokyo, September 23.*

If that is the case, all candidates should engage in an in-depth discussion about what to do about rice prices, which are once again rising. That, of course, includes Koizumi, who, as agriculture minister, is presently the Cabinet minister responsible for dealing with the issue. Hopefully, the discussion will be from the consumer's perspective, rather than just from the perspective of supporting producers.

The policies of the Shigeru Ishiba administration should also be reviewed. Koizumi has pledged to increase average wages in Japan by ¥1 million JPY ($6,800 USD) by FY2030. But that is the same as the LDP's campaign promise during the disastrous July election for the Upper House. Will he really be able to win support by sticking to this numerical target despite the recent crushing defeat at the polls?

Each candidate claims to aim for economic growth through investment in key sectors and other such initiatives. However, their specific policies are not particularly novel.

What we would really like to hear from the candidates is a discussion of what has been lacking in the growth strategies of previous administrations. That includes the Ishiba administration. Each candidate should share their view on how the lessons learned from those failures will be utilized.

(Read the editorial in Japanese.)

Author: Editorial Board, The Sankei Shimbun