Photo/Illutration Prime Minister Fumio Kishida answers a question from Takeshi Sasaki, co-head of Reiwa Rincho, at the group’s launch event in Tokyo on June 19. (Shinnosuke Ito)

Prime Minister Fumio Kishida showed support for budget austerity at the launch of a council on June 19 tasked with proposing to the government sustainable public finance and social welfare systems.

Six political party leaders attended the launch event for the “Reiwa Council of People” (dubbed Reiwa Rincho) in Tokyo, where they spoke about their policies.

“The post-COVID-19 era cannot help but be restricted by the rapid decline in population and the budget deficit, which amounts to 200 percent of Japan’s GDP,” said members of Reiwa Rincho at the event. 

Kishida mentioned in-fighting in the ruling Liberal Democratic Party over fiscal policy and how he supports fiscal consolidation.  

“Public finance is the basis of confidence in a country,” he said. "There are various arguments within the Liberal Democratic Party, but it’s the markets and the international community that assess the public finance, not us (politicians).

"The crucial point is whether Japan can maintain confidence.”

Analysts said the comment can be interpreted as Kishida keeping in check those who advocate expansionary fiscal policies ahead of the Upper House election on July 10 including opposition parties and some within the LDP, such as former Prime Minister Shinzo Abe.

Kishida showed understanding to the concerns expressed by Reiwa Rincho members.

“That fiscal consolidation needs economic growth first is another idea that I want to place importance on,” he said. 

However, “We need to continue arguing for fiscal consolidation,” he added.

He also spoke about the sustainability of the social welfare system.

“The crucial point is how quickly we can shift to all-generational social welfare services, in which how much people contribute to the system is determined not by their ages, but by their ability to pay,” Kishida said. 

Political leaders attending included Kishida, leader of the LDP, and Kenta Izumi, head of the main opposition Constitutional Democratic Party of Japan.

Reiwa Rincho aims to make proposals just like previous Rincho councils, which have historically called for significant changes in Japanese government and politics.

Political party leaders talked about their policies on public finance and social welfare--issues Reiwa Rincho described as “what the public needs to ask about now.”

For the CDP, Izumi said, “A Japan that doesn’t change and cannot change” leads to problems, such as the stagnant economy and declining population.

“We need to shift to an economy that prioritizes human rights and the environment in the new era,” he said.

Leaders of other parties who meet the requirements to submit a bill to the Upper House also attended the event.

They were Natsuo Yamaguchi of Komeito, the LDP’s junior coalition partner; Nobuyuki Baba of Nippon Ishin (Japan Innovation Party); Kazuo Shii of the Japanese Communist Party; and Yuichiro Tamaki of the Democratic Party for the People.

The council is made up of representatives from the private sector. 

Yuzaburo Mogi, honorary CEO of Kikkoman Corp., Takeshi Sasaki, former president of the University of Tokyo, and others became co-heads of Reiwa Rincho.

“Japanese society and democracy could plunge into a dangerous state unless we tackle our issues now,” Mogi said. 

Around 100 members of Reiwa Rincho, who are from businesses, labor unions, and academia, also attended the event.

They will exchange opinions with Diet members, governors and mayors as members of the council.

The council will have three working groups on the government systems, public finance and social welfare, and the use of land, respectively.

The groups will then put together a proposal to the government by the end of this year.

The council’s term is three years.

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