Former Secretary-General Shigeru Ishiba won the Liberal Democratic Party presidential election after a run-off vote. The new Ishiba administration, which is scheduled to be inaugurated on the 1st, will follow the Kishida administration’s economic policy and aim to completely overcome deflation, but there are high hurdles to overcome in achieving a “virtuous cycle.”

In presidential election, emphasis on continuing Kishida’s line

On the 25th, just before the presidential election, Mr. Ishiba held a press conference to explain his economic policies. Mr. Ishiba emphasized that he would continue the Kishida line, saying, “We will make the “virtuous cycle of growth and distribution” promoted by Prime Minister Kishida even stronger and more reliable.”

It is clear that he is trying to gain support from Prime Minister Kishida and the former Kishida faction in anticipation of the run-off election, but this is probably a sign that Mr. Ishiba himself is comfortable with Kishida’s line.

Mr. Ishiba made it clear, similar to the Kishida administration, that he would “aim to raise wages in a way that exceeds the rise in prices,” and he also set a goal of raising the minimum wage to 1,500 yen by the end of the 2020s.
Regarding fiscal consolidation, Mr. Ishiba originally acknowledged the importance of “fiscal discipline in preparation for emergencies, which is necessary for the nation,” but added, “We will carry out flexible fiscal spending most effectively.” For the time being, we have shown an attitude of focusing on realizing a “virtuous cycle,” and we are also aligned with the Kishida line.

The fact that we have clearly stated that we will continue the Kishida line means that we basically support the direction of monetary policy, which is to gradually normalize financial conditions and achieve both a world with interest rates and economic revitalization.

Strengthening of financial income taxation is back on track

Immediately after the presidential election began, Mr. Ishiba said that he wanted to strengthen financial income taxation, which became one of the issues in the presidential election. Mr. Ishiba probably raised the issue of fairness, since financial income such as interest and dividends benefits the wealthy through a separate withholding tax system, but he was criticized for going against the flow from savings to investment. was exposed to.

After that, Mr. Ishiba went on the defensive, saying, “I don’t mean to reduce NISA,” and at a press conference on the 25th, he effectively corrected the course, saying, “The flow from savings to investment will further accelerate.” I was forced to.

The reality is that if a financial income tax were introduced, it would be obvious that stock prices would fall, and it would be a pain even for “ordinary people” who just started investing with NISA. Some people describe it as San-like.