Press Conference by Prime Minister Kishida

October 28, 2022
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[Provisional translation]

[Opening statement]

Today I will address you regarding our package of economic countermeasures.

Following upon the measures we put forth in March, April, July, and September, the Cabinet just now approved a large-scale package of comprehensive economic measures.

1. Aims of these economic measures

This is a set of comprehensive economic measures to overcome rising prices and realize economic revival.

By undertaking in an integrated manner both measures to combat rising prices and measures to stimulate the economy, we will protect people's daily lives, employment, and businesses while also strengthening the economy heading into the future.

This new array of measures, on a scale of approximately 72 trillion yen with fiscal expenditures of 39 trillion yen, will boost our gross domestic product (GDP) by 4.6 percent. Moreover, by lowering electricity fees by 20 percent and keeping the price of gasoline in check, we will reduce consumer prices by more than 1.2 percent through 2023.

2. Measures to address rising prices and the weaker yen

Within our measures to tackle rising prices we placed priority on measures addressing the price of energy. We will set in place intensive measures designed to curb dramatic changes in the price of gasoline, kerosene, electricity, and natural gas, which are the predominant factors underlying the sharp rise in various prices. By doing so, we will safeguard the daily lives of you the public so that we do not experience inflation reaching as high as 10 percent, as has happened in Europe and the United States.

First and foremost, we will help to insulate people's daily lives from rising prices.

To address household electricity costs, beginning in January, the national government will shoulder roughly 20 percent of the average amount by which fees are expected to rise at the beginning of the fiscal year. To assist companies, we will implement measures by which the national government will cover an amount corresponding to renewable energy surcharges. We will take equivalent measures to address natural gas charges. We will also continue to reduce the price of gasoline, currently a reduction of 30 yen per liter, into 2023. These will result in assistance of 6 trillion yen in total, with the average household receiving 45,000 yen in total assistance over the first half of 2023.

In the context of momentous decreases in the birthrate, in order to support households raising children, we will establish a package that combines integrated, escort runner-type consultation assistance from pregnancy through childbirth and child-rearing together with the equivalent of 100,000 yen in economic assistance. From next April, we will increase the Childbirth Lump-Sum Allowance substantially. We will also reinforce our assistance for families with children that are facing economic hardships, including by creating Kodomo Shokudo and places where children feel they belong.

In response to accidents in which children have been left in nursery school shuttle buses, to ensure that such tragic accidents are never repeated, as we move towards summer next year, we will require such buses to be fitted with safety mechanisms and establish an assistance system under which the national government bears the entirety of the costs for installing standard safety mechanisms.

We will restore expenditures on travel, lodging, entertainment, and other sectors that contracted because of the crushing COVID-19 situation. Nationwide travel support will provide a 44,000 yen discount per night for lodging for a family of four, and event discounts will reduce the cost of movie theaters and theme parks by 20 percent. We will provide support for the expenses accompanying holding theater productions and concerts, which were heavily impacted by COVID-19. We will vigorously support both the "software" and "hardware" aspects of tourism by enhancing the quality of tourism resources and also remodeling guest rooms and making other improvements so that tourism income increases. Strengthening the ability to earn money in this way will enable Japan's local regions also to become revitalized.

We will also protect small- and medium-sized enterprises (SMEs) from price rises. We will eradicate the maltreatment of subcontractors and ensure that higher prices are able to be appropriately passed through to clients. For SMEs that suffered damages because of COVID-19, we will prepare a new system for refinancing which offers a 100 percent guarantee and assist 10,000 SME owners who will take on the challenge of new export operations.

3. Wage increases and structural wage increases

Along with the comprehensive measures to address rising prices I just mentioned, we should prioritize wage increases that keep pace with rising prices. The spring 2023 annual wage bargaining negotiations will be decisive in determining whether or not we are able to enter a virtuous cycle of growth and distribution. As a first step towards realizing structural wage growth, we will do our utmost to foster the momentum of management and labor by, for example, creating guidelines with the involvement of Keidanren (Japan Business Federation) and RENGO, the Japanese Trade Union Confederation, so that wage hikes stay even with rising prices.

The Government will provide subsidies and give preferential treatment within public procurement to companies implementing wage hikes, and we will raise the minimum wage in a way that thoroughly accounts for rising prices.

Moreover, with a view to bringing about continual wage increases, we will press forward with comprehensive reform that covers wage increases, labor mobility, and investments in people.
Towards that end, we will fundamentally reinforce our investment in people, which is the first pillar of my New Form of Capitalism, and utilize a large-scale package, 1 trillion yen in scale over five years, to support the transition of workers into regular employment, career changes, and reskilling -- in other words, workers brushing up their skills to be able to transfer into growth fields.

At the same time, we will expand NISA, a tax exemption program for small investments -- the Japanese version of an ISA -- and iDeCo, individual defined contribution pensions, with the aim of doubling income derived from the management of assets.

4. Restoring and reinforcing local areas' ability to earn money, making use of the weaker yen

We will skillfully leverage the benefits of the weaker yen while we curb rising prices. We will, at an early time, achieve 5 trillion yen in high-quality inbound demand that is suitable for an era in which we carry on with our daily lives with COVID-19 in the background. We will expand assertive domestic investment in semiconductors, storage batteries, and other such areas to restore a Japan as a country oriented to cutting-edge manufacturing.
Regarding agricultural products as well, we will promote agricultural exports, aiming at 2 trillion yen of such exports annually.

We can cite semiconductors as a representative example of assertive domestic investment. Treating domestic investment as an opportunity, we will make our supply chains more resilient. Kumamoto's invitation of a Taiwan Semiconductor Manufacturing Company (TSMC) semiconductor plant is expected to yield local economic effects of 4 trillion yen and 7,000 additional jobs over ten years. Monthly salaries will also rise by 50,000 yen. In addition, we will expand domestic investment in semiconductors nationwide taking 1.3 trillion yen of measures, including through joint Japan-U.S. development of next-generation semiconductors.

5. Investment and reforms to foster growth

In order to fundamentally reinforce our local communities and the economy, we will undertake assistance measures at the unprecedented level of 6 trillion yen in total in the four priority areas of startups, innovation, digital transformation (DX), and green transformation (GX).

Even as the global economy slows down considerably as we head into 2023, we will take advantage of Japan's financial environment and the sense that Japan is relatively inexpensive when costs are denominated in dollars, leveraging them into opportunities for economic growth. We will kick off our Five-Year Plan for Promoting Startups, investing 1 trillion yen to strengthen our fostering of human resources as well as our provision of finance. 

In particular, we will stimulate assertive large-scale private sector investment in next-generation fields. Among our new measures to be taken, we will inject roughly 3 trillion yen into next-generation fields, including leading-edge semiconductors, batteries, robots, and so on, to catalyze private-sector investment. This assistance will induce next-generation large-scale investment, which will in turn result in an economic effect amounting to over 9 trillion yen in induced production, over 2 trillion yen in increased exports, and additional employment benefiting roughly 490,000 people.

We will create in local areas industrial platforms that integrate related industries, human resources development, and the like.

6. Conclusion

This concludes my explanation of the key points of the comprehensive economic measures decided today by the Government and the ruling parties.

In compiling this summary, I placed emphasis on showing a broad perspective of political leadership. I set the ruling parties' policy deliberation process in motion earlier than in typical years and had the party leaders take a decision on the overall outline of the measures to curb dramatic changes in electricity charges, leaving government offices to work out the specifics. I also created opportunities to ask questions directly regarding opposition parties' proposals that we considered to be useful as references.

The Ukraine situation is adding a degree of tension, in light of the nuclear weapons threat arising and other factors. Some experts view the world as now facing a true energy crisis for the first time in history. In preparation for economic downside risk at a global scale that is difficult to predict at the present time, we have decided to take every possible top-down response.

From now, we will work swiftly to formulate a supplementary budget to ensure we deliver these economic measures to the people within their daily lives at the earliest possible time. We will also make all-out efforts to promote and publicize the policies we have prepared so that the citizens can make use of them to the greatest extent.

I sincerely ask all of you for your understanding and cooperation.

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