Chief Cabinet Secretary Yoshihide Suga Photo: Philip Fong/Pool via REUTERS
business

Japanese firms want Suga to become next PM, tackle fiscal reform: poll

13 Comments
By Tetsushi Kajimoto

A majority of Japanese firms want top government spokesman Yoshihide Suga to become the next prime minister as many see no need to change the status quo on stimulus policy at least until the coronavirus crisis ends, a Reuters poll found.

Highlighting worry about snowballing public debt, however, fiscal reform topped firms’ wish list for the incoming government, the poll found, underlining the difficulty to contain the virus and revive the economy while putting the fiscal house in order.

Few picked the “womenomics” policy of boosting the role of women in the economy and politics, the survey showed.

Suga, seen as a favorite to succeed Shinzo Abe, who is stepping down due to poor health, is widely expected to win the ruling Liberal Democratic Party’s (LDP) leadership election on Monday. The winner is virtually assured of becoming prime minister with the LDP’s parliamentary majority.

The Corporate Survey found 56% of firms want Suga to become premier, outdistancing the other candidates - former defense chief Shigeru Ishiba and former foreign minister Fumio Kishida.

“We cannot expect major reform but we should aim for economic recovery by extending the status quo,” a machinery maker manager wrote in the survey.

“The health crisis has boosted fiscal spending, and there’s a limit to postponing debt repayment,” wrote a pulp and paper firm manager. “We don’t want to face tax hikes” to repay public debt.

The survey, conducted for Reuters by Nikkei Research from Aug 31 through Sept 9, canvassed 485 large and mid-sized non-financial firms. About 230 firms answered the questions, on condition of anonymity.

In the survey, 85% of firms saw greater benefits than demerits from nearly eight years of the “Abenomics” policy mix of aggressive monetary and fiscal stimulus and reform.

Many companies said they seek no change in economic policy and called for more stimulus as a majority saw no end to the pandemic.

Still, the survey showed fiscal reform topped the agenda, picked by one-third of firms, a sign of growing worry about the industrial world’s heaviest public debt burden.

Fiscal reform was followed by boosting economic ties with other countries and digital transformation.

© Thomson Reuters 2020.

©2020 GPlusMedia Inc.

13 Comments
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Of course they do, not only can he do an impressive amount of sit ups, his party will continue to subside failed Buisness models, ensure access to a cheep labour pool, and allow then to build cash reserves. Allowing foreign competition only through complicated bueacatic hoops that get smaller with each step. Why wouldn't they.

10 ( +10 / -0 )

A majority of Japanese firms want top government spokesman Yoshihide Suga to become the next prime minister as many see no need to change the status quo on stimulus policy

Just ask government for more money and break, without ever try to find out make things more efficient also without try to really expanding their current market.

5 ( +5 / -0 )

A majority of firms want Suga and he has been anointed by the ruling party. That's how it works in a democracy right?

These firms' desire for "fiscal reform" is usually code for austerity measures including the already proposed regressive rise in sales tax and cuts in social services. Corporate tax rates and subsidies won't be touched of course.

Encouraging as usual to see the proactive LDP and their corporate backers "see no need to change the status quo on stimulus policy at least until the coronavirus crisis ends" as small business bankrupticies, foreclosures and the misery index pile up and more direct payments to citizens would be the wisest approach to address these issues.

4 ( +4 / -0 )

If they want more fiscal stimulus and they want "fiscal reform," then they don't know what they want.

a sign of growing worry about the industrial world’s heaviest public debt burden.

Why are they worried? Any specific reasons or are they just drinking kool-aid? It seems they don't realize that to balance the fiscal situation, the govt would need to take money out of the private sector and give it to the government sector.

That makes them masochists.

4 ( +5 / -1 )

In almost any country, the candidate backed by corporate interests is always the worst candidate for the general population's well-being.

9 ( +9 / -0 )

Abenomics greatly overinflated the values of stocks and assets, while it created no actual values at all!! Of course, Japanese firms want Suganomics as the extension of Abenomics. These firms have been desperate to sell their assets to naive foreign investors for years, except most foreign investors are spooked and cautious through the recent exodus of more than 132 billion USD out of Japanese stocks/assets.

Warren Buffett's streak of acquiring five Japanese trading dinosaurs may encourage many of them to think that Abenomics was successful to fool a legendary investor. They put more faith into Suganomics as the result.

For the people of Japan, the sales of Japanese economy has already begun. Their economy is gradually Americanized by the neoliberal world order. Expect the part-time employments to become a permanent aspect of Japanese labor economy. Low unemployment rate is actually just a very high part-time employment rate. Decreasing quality of life will become a norm, and more J-companies are operated by Anglo-American principles who poisonously emphasize growth above social values.

This is the future of Japan, thanks to old geezers vote for LDP cronies and apathetic youngsters.

8 ( +11 / -3 )

Corporatocracy. The corporations are holding obscene amounts of cash. Time to get our pitchforks and show them who is in charge.

7 ( +7 / -0 )

Abenomics greatly overinflated the values of stocks and assets.

Certainly not property. Local governments are giving away land for free in some cases. Stock prices are up but valuations here are not nearly as sky high as in the US or other markets. What assets are "overinflated"?

-3 ( +0 / -3 )

These business types need to get with the program, we are supposed to believe that MMT is a thing now!

“We cannot expect major reform but

Vested interests will kick and scream at such prospects, no doubt about it. But it is what Japan needs, if it is to "aim for economic recovery", not

by extending the status quo,”

“The health crisis has boosted fiscal spending, and there’s a limit to postponing debt repayment,” wrote a pulp and paper firm manager. “We don’t want to face tax hikes” to repay public debt.

If it isn't tax hikes, it's reforms to unleash some higher economic growth potential, and spending cuts, instead.

But that's only going to start to slow the increase in debt levels. To actually start to pay debt down is the next goal, after stopping the increase in debt.

It's a 40 trillion yen deficit, equivalent to shrinking per capita spending of around 800,000 yen per year to 500,000 yen per year.

Instead of higher taxes.

the “Abenomics” policy mix of aggressive monetary and fiscal stimulus and reform.

Abenomics did not include reform. Only, "talk of reform".

Still, the survey showed fiscal reform topped the agenda, picked by one-third of firms, a sign of growing worry about the industrial world’s heaviest public debt burden.

Not sure the worry is growing, but glad to see that it's the top concern among businesses. It's my concern too. Something should be done about it, rather than simply dreaming of miraculous economic growth sufficient to plug the deficit. A serious effort would attack the deficit from various angles, including cuts / reforms to spending.

1 ( +3 / -2 )

There is next to no chance that any of the current crop of candidates will institute the sort of reform that the Japanese economy and people desperately need. Entirely agree with fxgai above. Radical reform of the function of government, corporate governance and culture. May be needed but won’t happen.

3 ( +4 / -1 )

Why???.

0 ( +1 / -1 )

“We cannot expect major reform but we should aim for economic recovery by extending the status quo,” a machinery maker manager wrote in the survey.

How can politicians in their seventies and eighties adequately comprehend an economy that is 21st century-there is a massive disconnect...

1 ( +1 / -0 )

Anyone of them (the 3 candidates) are able to tackle fiscal reform. I don't know ithe fact of what Japanese firms are requesting to be Suga next prime minister. I only feel that something Reuters doesn't know LDP politicians supporting Suga arranged well a "plot" to firms.

0 ( +0 / -0 )

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