By Todd Crowell
TOKYO
Japan's prime minister is to turn to the polls to see if his decision not to hike taxes can gain electoral support.
Shinzo Abe said during a news briefing Tuesday that he would dissolve the lower house later this week, hold a general election on Dec. 14, and postpone a planned sales tax hike to April 2017.
"I will dissolve the lower house on [Nov.] 21," Abe told reporters.
The country's beleagured economy has contracted since the tax rate was raised from 5 percent to the current 8 percent in April.
Abe had been expected to announce the dissolution of parliament and set a date for the election on his return from a week-long visit to China and last weekend's G20 summit in Australia.
On arriving home, he was greeted by black newspaper headlines underlining the fact that Japan had entered recession.
According to the cabinet economic report of Nov. 17, the country’s gross domestic product had shrunk by 1.6 percent in the third quarter. Coupled with negative growth in the second quarter, the slowdown meets the official criteria for a recession.
An eight percent sales tax increase that went into effect April 1 hit consumption, both small goods and big ticket items such as automobiles that are in a slump locally. Other economic developments, such as the weakening yen, also increased the costs of imports.
It had become increasingly obvious that Abe's government had made a bad miscalculation when it approved increasing the national sales tax.
At the time the government was confident that the effects of the rise would be small and transitory and the country would quickly climb back into positive growth, permitting the government to increase the tax again to 10 percent.
On returning Monday, Abe indicated that he wanted to make the general election a “people’s mandate over the postponement of the sales tax [increase]."
That would seem to be a pretty safe platform to run on. But other problems are piling up. They include this Sunday’s election of an anti-American governor of Okinawa, the beginning of the official secrets act, re-starting idled nuclear power plants and the economy.
After nearly two years in office, Abe and his government still remain relatively popular. The administration's public approval ratings have dropped into the 40s, but that is still high by recent Japanese standards. This fairly solid support is linked to his promise to fix the economy.
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