- Japan’s Abe Announces Plans for 2 Trillion Yen Spending Package
Japanese Prime Minister Shinzo Abe announced on Monday that he would seek to implement a 2 trillion yen ($18 billion) spending package to expand access to education and cut waiting times at child-care centers. He made the comments shortly before his coalition partner said an election would be held, likely on Oct. 22.
Abe said he would make use of revenue from a planned consumption-tax hike set to take effect in October 2019. Revenue from increasing the sales levy had previously been marked mostly to replace deficit spending on the social safety net.
He said that he wanted to settle on the details of the package before the end of the year. The plan would make pre-school education for children age 3 to 5 free, and provide free child care for those under age 2 for low-income families.
Abe said it would be important to find a balance between spending on the policy package and improving Japan’s finances. The nation has one of the largest public debt burdens among developed countries, with a debt-to-GDP ratio of almost 240 percent, according to the International Monetary Fund.
He said he also wants to consider measures to increase wages and encourage investment. Abe described the time from next fiscal year through fiscal 2020 as a three-year period of intensive investment to boost productivity and wages.