The economic vision of the new LDP leader Ishiba points to continuity and tax reform; Incoming Prime Minister hopes to ‘consolidate’ Kishida’s efforts and combat rising prices

The newly elected president of the ruling Liberal Democratic Party, Shigeru Ishiba, has expressed his intention to continue in principle the economic policies of Prime Minister Fumio Kishida. The economic measures Ishiba highlighted as part of his campaign platform include tackling high prices and labor market reforms, which have also been central focuses of the Kishida government. By emphasizing the continuity of Kishida’s approach, Ishiba wants to convey a sense of stability. However, it remains to be seen how he will bring his own unique direction in the future.

At a press conference held on Friday after the LDP presidential election, Ishiba emphasized: “We must consolidate the hard work that President Kishida has done to overcome deflation.” He also added: “I want to further accelerate the ‘new form of capitalism’ [advocated by the Prime Minister].”

Addressing the measures against rising prices, Ishiba noted that there will be a “time gap” before wage increases exceed price increases. He stated: “I want to carefully assess which policies will be effective in the areas of food and energy,” but he refrained from clarifying whether he would extend current subsidies for electricity and gas costs.

Among Ishiba’s promises, his labor market reforms are almost identical to those of the Kishida government. One area that shows a distinctive approach is his proposal for a more dynamic corporate tax system. He noted: “There is still room to increase corporate taxes,” but with the general election looming, the hurdles to tax increases are high, and the challenge for Ishiba will be in demonstrating his ability to pass such measures press.