Abe presses Japan firms to raise salaries to mitigate tax hike impact
TOKYO (Kyodo) -- Prime Minister Shinzo Abe increased pressure on Japanese companies Tuesday to raise salaries for workers, saying a critical moment will come in April when the country raises the sales tax amid concerns it could suppress the nascent economic recovery.
"Whether many companies raise salaries in April will be critically important," Abe told a meeting of his Liberal Democratic Party. April is also the beginning of the country's new fiscal year.
With management and labor unions due to start annual wage talks soon, Abe has repeatedly asked major companies such as Toyota Motor Corp. to cut into retained earnings to fund a pay increase.
"There is no other way but for each company to try its best to exit from this persistent deflation," he told the LDP meeting.
Abe also said he will attend the annual World Economic Forum, starting Jan. 22 in Davos, Switzerland, to brief other countries' leaders and experts on Japan's economic policies.
"I want to explain which direction Japan aims to move in," he said.
There are concerns that the sales tax hike from the current 5 percent to 8 percent on April 1 will weaken consumer spending and business investment, in a blow to the premier's efforts to end nearly two decades of deflation.
In return for raising salaries, Abe's government is considering or has introduced pro-business measures including corporate tax cuts.
Also Tuesday, Abe told his ministers at their first meeting in 2014 that he wants them to stay focused on addressing issues such as reconstruction in the areas of northeastern Japan devastated by the March 2011 earthquake and tsunami, as well as revitalizing the economy, top government spokesman Yoshihide Suga said at a press conference.
The chief Cabinet secretary said it will be a crucial year as the government is seeking economic growth and fiscal discipline at the same time.
Finance Minister Taro Aso echoed the view, while telling reporters that the government will first seek to pass two state budgets -- a supplementary one for fiscal 2013 and an initial one for fiscal 2014 -- through the Diet, which will convene an ordinary session later this month.
Aso said the government aims to "make up for declines" in economic output during the April-June period stemming from the tax increase with stimulus measures to be financed by the extra budget for the current fiscal year ending March 31.
January 07, 2014(Mainichi Japan)