Yoshimasa Hayashi. - Photo: Bloomberg
TOKYO: Japan’s top government spokesman Yoshimasa Hayashi vowed to ensure that real wages grow at a sustained pace of about 1% as part of a policy platform that he hopes will help him win the ruling party’s leadership race.
The chief cabinet secretary presented policy proposals Thursday (Sept 18) that he’s dubbed the "Hayashi Plan,” with wage growth a key priority.
Hayashi emphasized his intention to build on the achievements of the administrations of both outgoing Prime Minister Shigeru Ishiba and his predecessor Fumio Kishida, positioning himself as a continuity candidate.
"I’ve been serving as chief cabinet secretary since the latter half of the Kishida administration, supporting the government throughout,” Hayashi said at a press conference. "Building on that foundation, I’d like to carry it forward while also adding something new.”
Wages have to come higher to help consumers battle supply-side price gains.
"Cost-push inflation - that’s what we have to correct this time,” Hayashi said, explaining the reasoning behind his focus on real wage growth.
Hayashi released his policy outline ahead of the official launch of the Liberal Democratic Party’s leadership race campaign next week.
Hayashi is expected to face off against four rivals, including Agricultural Minister Shinjiro Koizumi and former economic security minister Sanae Takaichi.
The vote is scheduled for Oct 4.
Hayashi could attract votes away from Koizumi and Takaichi in the same way Ishiba ended up as the surprise winner in last year’s LDP election.
The chief cabinet secretary said that he wants to carry on Ishiba’s will, underscoring his position as a continuity candidate that might reassure markets.
Still, the idea of continuity may not resonate among LDP members and voters seeking change.
Hayashi also lacks Ishiba’s deep support among Japan’s regional party members.
On the contentious issue of whether to cut the consumption tax, Hayashi struck a cautious note, emphasizing that the tax is an important source of funding for social security needs.
While he said he might consider a reduction once welfare demands decline due to demographic changes, he stressed that now is not the time.
Touching on monetary policy, Hayashi noted that Japan has already re-entered the world of positive interest rates, one step removed from the era of severe deflation that resulted in the so-called lost decades after the real estate bubble collapsed around 1990.
Hayashi, who previously served as foreign minister, suggested Japan must strengthen its defense capabilities and alliance with the US for deterrence, according to his policy proposal.
Hayashi also cited the need to safeguard national interests in the East China Sea. He is often viewed as having a more moderate stance toward China compared with other party heavyweights.
A recent Kyodo public opinion poll placed Hayashi in third place with support from 11% of respondents, behind Takaichi at 28% and Koizumi at 23%. - Bloomberg
