Prime Minister Shinzo Abe held a press conference at the Prime Minister's Office on November 18 to announce his intention to delay an increase in the consumption tax by 18 months and to dissolve the Lower House on November 21. The original schedule called for the consumption tax to be increased to 10% in October of next year. During the conference, Prime Minister Abe voiced his resolve to continue to move strongly forward on economic revitalization and fiscal rebuilding.
Prime Minister Abe characterized the preliminary July-September quarter gross domestic product (GDP) figures published on November 17 as an indication that "we have unfortunately not returned to a growth trajectory," and voiced his concern that "an increase in the consumption tax [in this context] could hamstring the economy and impose large burdens on the life of the people." The delay, he explained, was to prevent "another decline in consumer spending that would risk slipping back into deflation." He continued, "Our conclusion is not to increase the consumption tax to 10% in October of next year as called for in the law, but to delay by 18 months."
Commenting on the dissolution of the Lower House, Prime Minister Abe said, "This is a weighty decision for the people, and it behooves us to hear their wishes." He asked for "a decision from the people" on whether to delay the increase of the consumption tax to 10% until April 2017 but not to delay the increase further than that, and whether to continue to pursue the Abe Cabinet's growth strategy.
Prime Minister Abe also announced that he would submit to the next ordinary session of the Diet a supplementary budget containing economic measures to leverage consumer spending and to stimulate regional economies.
At the same time, he said, "We are not giving up on fiscal rebuilding," and indicated that a concrete plan to achieve fiscal soundness targets would be formulated by next summer.
Within that framework, Prime Minister Abe said, "We will simultaneously achieve economic revitalization and fiscal rebuilding. That is why we arrived at the decision that I am presenting to you today."
During a press conference after the dissolution of the Lower House on November 21, Prime Minister Abe named the move the "Abenomics dissolution," and once again explained that the decision before the people was whether or not to continue with Abenomics. "There is no other path to economic recovery. We want to make that case during the campaign," he said, explaining his resolve coming into the general election.
