The program examined the views of overseas economic experts, who said that Japan’s labor share is low and that workers have limited power to keep companies in check. It also covered discussions surrounding the tax reform outline and the lack of clarity over funding sources.
Against the backdrop of Cabinet approval of a tax reform outline amid a Cabinet reshuffle, the government outlined plans to cut the consumption tax by 1% for 2 years starting next fiscal year and introduce income-linked benefits for low- and middle-income earners. However, no specific measures to secure funding were announced, and the details are expected to be decided during year-end budget preparations. ABEMA Prime examined the challenges facing Japan’s labor market with 5 economic experts from overseas and Japan.
Professor Heather Montgomery pointed to the lack of clarity over funding sources and suggested that tax cuts might not be appropriate for the Japanese economy over the long term. Ke Long (柯隆) said the burden of implementation costs would be an issue and argued that a limited 2-year application would not produce a permanent effect. David Atkinson, meanwhile, quantified the gap in perceptions of economic conditions and stressed that the labor share is extremely low.