Japan opposition unveils `Yurinomics' platform to challenge Abe

Friday , October 06, 2017 - 7:44 AM

Isabel Reynolds and Emi Nobuhiro

(c) 2017, Bloomberg.

Tokyo Governor Yuriko Koike’s opposition party said it may impose taxes on large companies’ cash reserves and permanently rid Japan of nuclear power as it unveiled a slew of campaign promises on Friday ahead of an Oct. 22 election.

In a manifesto dubbed “Yurinomics” -- a counter to Prime Minister Shinzo Abe’s “Abenomics” platform highlighted by large injections of liquidity -- Koike vowed to freeze a consumption tax increase, end discrimination against homosexuals and protect abandoned pets. Her Party of Hope plans to maintain Abe’s unprecedented monetary easing for the time being, while working with the Bank of Japan to seek a smooth exit strategy.

“We are taking on taboos with our ideas,” Koike told reporters in Tokyo. “We are including issues other parties haven’t been able to tackle.”

Koike, a former newscaster, has rapidly assembled an alternative conservative party to challenge Abe’s long-ruling Liberal Democratic Party. While opinion polls indicate her group is unlikely to win the election, a substantial loss of seats could prompt the ruling coalition to oust Abe as LDP leader, a position he’s held since 2012.

A poll published by the Asahi newspaper Thursday found 12 percent of respondents said they would vote for Koike’s party in the proportional representation section of the election, putting it second behind the LDP on 35 percent. Her party so far is fielding 192 candidates, roughly 40 percent of the number of seats up for grabs.

Financial markets so far have shown little sign of concern about any political shift in Japan. The Topix index of Japanese shares headed for its fourth weekly gain, the longest stretch since May, as the latest economic data reaffirmed the U.S. is on a solid growth track.

Koike’s Party of Hope acknowledged several successes of the “Abenomics” economic program, including a rise in stock prices, a weaker yen and low unemployment. Still, it said the benefits were not being felt by ordinary people.

Her party plans to consider selling state assets and cutting spending, including on public works and on the salaries paid to lawmakers, before raising the sales tax, the party said. It said there would be no special treatment for friends, in an apparent reference to a series of cronyism allegations directed at Abe earlier this year.

The party’s manifesto said that corporate tax reserves exceeded 300 trillion yen ($2.7 trillion) nationwide, and that taxing them could help restore fiscal balance. It provided no further details. Abe’s ruling coalition partner Komeito said in its own policy platform this week it would consider making firms reveal the amount of reserves they hold.

A tax on cash reserves would affect several of Japan’s biggest companies, including Mitsubishi UFJ Financial Group, Honda Motor Co. and Nippon Telegraph & Telephone Corp. Toyota Motor Corp., the country’s most valuable company and biggest employer, had retained earnings of about 17.6 trillion yen, according to data compiled by Bloomberg -- more than the entire market value of any other Japanese company.

The Party of Hope on Friday also made official its pledges to freeze a consumption tax increase to 10 percent in 2019, and seek to change the constitution to permanently ban nuclear power. At the same time, it would bolster the share of renewables in the energy mix to 30 percent. Shares of Kansai Electric Power Co. fell on the news.

Other pledges contained in the Party of Hope’s manifesto include:

- Pursue debate on changing constitution, including pacifist Article 9

- Seek equal representation for women in parliament

- Abolish government-related financial institutions and public-private funds

- Get rid of LGBT discrimination

- Party lists a range of things to be “reduced to zero,” including passive smoking, pollen allergies, waiting lists for children’s daycare services, the number of abandoned pets being killed

- Bolder deregulation in special economic zones.

- With assistance from Takashi Hirokawa

japan-opposition

Sign up for e-mail news updates.

×