Suga positions carbon goal, digitization as pillars for economic revitalization

With the coronavirus pandemic not yet under control, Suga apparently aims to revitalize the economy with signature policies, ahead of a dissolution of the House of Representatives for a general election.

“What our nation needs are sources of growth for the post-coronavirus era. Green [initiatives] and digital policies are key,” Suga said at the press conference. He expressed a commitment to realizing the development of large-scale hydrogen production equipment, low-cost storage batteries and 6G, the successor to the high-speed, large-capacity 5G telecommunications standard.

 

Concerning a digital agency to be established as the headquarters for digitization, Suga expressed his intention to appoint about 100 experts from the private sector, saying that he would create a model for personnel who can advance their careers while moving back and forth between the public and private sectors.

 

■ Resumption of economic activities

Since the start of the Suga Cabinet in September, the prime minister has attached importance to promoting the resumption of economic activities while taking measures against the coronavirus. However, experts of a government subcommittee on coronavirus measures have been increasingly cautious about the Go To Travel tourism promotion campaign amid a spike of infections in winter.

Nevertheless, Suga has told his aides that the campaign should be promoted resolutely. He plans to propose an extension to the government’s additional economic measures to deal with the coronavirus to the end of June next year. He mentioned the significance of the campaign during the press conference, saying: “There are about nine million people involved in the tourist industry in Japan. The government has made decisions based on what will be most useful for regional economies.”

The prime minister is also focusing on environmental measures and the digitization of public administration as part of long-term steps to strengthen the economy.

He probably believes that it would be easy for the administration to achieve results in fields concerning the environment and digitization, “unexplored areas” that were not prioritized by the administration of former Prime Minister Shinzo Abe.

Suga’s leadership within the administration is expected to be tested by an increase in out-of-pocket medical expenses for people aged 75 years and older, one of the major issues in the reform of “social security for all generations” that will review the structure of burdens and benefits for elderly people and working generations.

Suga said to his aides that unless this issue is resolved, the reform cannot be said to be a reform for all generations in the true sense. At the press conference, Suga said, “It’s important to decrease the burdens of younger generations as much as possible.”

However, Liberal Democratic Party coalition partner Komeito is cautious about expanding the target of those whose out-of-pocket expenses would increase, because of concerns about the impact it would have on the general election, which will take place in autumn next year at the latest.

A meeting to discuss a draft for the reform was abruptly canceled just before it was to start on Friday as the coalition parties could not reach a consensus on the issue.

“The future handling of the government will depend on whether Komeito gets its way or the prime minister stands firm,” an LDP member with ministerial experience said.

 

■ Lower house dissolution

The decision to dissolve the lower house for a general election will be a focal point for the future management of the government.

Asked about the timing of the dissolution at the press conference, Suga indicated that economic revitalization and measures to prevent the spread of the coronavirus are the main priorities. “I’d like to devote all my efforts to these issues for the time being,” he said.

“I will think it over carefully,” he added, with an eye seemingly on the expiration of the term of lower house lawmakers in October next year.

Suga has been cautious about dissolving the lower house early next year, but reportedly is considering the idea as one of his options. Many within the LDP have called for an early dissolution while the Cabinet’s approval rating remains strong. But, in addition to the sudden increase in coronavirus cases, scandals on money and politics involving former Prime Minister Abe and former agriculture minister Takamori Yoshikawa have come to light, dampening the momentum.

The government plans to convene the ordinary Diet session on Jan. 18 and submit proposals for a third supplementary budget for fiscal 2020 and a fiscal 2021 budget.

The prime minister intends to focus on realizing the early passage of budget plans and implementing a series of measures.

For that reason, the lower house is more likely to be dissolved in spring or later after the passage of the fiscal 2021 budget, or after the Tokyo Olympics and Paralympics scheduled for next summer.

Key policies of the Suga Cabinet have begun to produce results. Regarding the lowering of mobile phone fees, NTT Docomo Inc. unveiled Thursday the lowest-price large-capacity mobile plan in the industry. Meanwhile, preparations are underway for a digital agency, which is expected to be launched in September next year.

A mid-ranking LDP lawmaker said that if dissolution is delayed, there could be a dissolution immediately before the expiration of the term of lawmakers, which tends to work against ruling parties.

However, achieving tangible results ahead of a general election appears to be Suga’s basic strategy. He is expected to determine the timing of the dissolution, taking into consideration the infection situation and other factors.