Japan¡¯s top business lobby has proposed a policy plan to boost the country¡¯s gross domestic product to ?1 quadrillion ($6.6 trillion), urging the government to raise taxes on the rich to achieve a ¡°virtuous cycle of growth and distribution.¡±
The Japan Business Federation, or Keidanren, on Monday suggested a series of policy proposals called aimed at tackling Japan¡¯s declining birth rate and aging population and lack of energy resources.
¡°The ¡®Future Design 2040¡¯ demonstrates what our country¡¯s ideal society looks like in 2040, around the time (Japan¡¯s) elderly population is expected to peak, and presents policies to realize it,¡± Masakazu Tokura, who heads the organization, told reporters.
The population crisis is expected to increase the burden of social insurance premiums but also diminish local economies, which the lobby group said should cooperate across prefectural lines within a regional unit to implement their own policies for growth.
The proposal suggests the tax hike on higher-income earners from fiscal 2025 to secure ?5 trillion in additional tax revenue by fiscal 2034 to curb the increase of costs associated with social insurance premiums.
If implemented, the tax-to-GDP ratio would rise gradually from 29.7% in 2025 to 31.8% in 2040 while the social security burden ratio will only increase from 18.4% to 18.6%.
This will lessen the burden on the working population, whose disposable income will increase, and, in turn, boost consumption.
In addition, the lobby group calls for the maximum use of nuclear energy and increased investment in next-generation reactors and nuclear fusion to achieve decarbonization, which it says is a must for an island nation without energy resources.
Japan, which currently operates 13 nuclear power plants and plans to have a total of 27 restarted by 2030, needs to rush construction and replacement of facilities as capacity is expected to take a steep dive from 2040, Keidanren said. Failure to open new plants will result in only eight operating in 2060, it said.
The proposal, if followed through, estimates Japan¡¯s real GDP to grow at an annualized pace of about 2% and boost nominal GDP to ?1.006 quadrillion, compared with ?595 trillion in fiscal 2023.
Tokura, who is now in his final year as Keidanren chief, asked for the government and parliament ¡°not to run away and to discuss this head on¡± at Monday¡¯s news conference.
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