Japan firms want Suga to become next PM, tackle fiscal reform: Reuters poll By Reuters

Japan firms want Suga to become next PM, tackle fiscal

© Reuters. FILE PHOTO: Liberal Democratic Party debates in Tokyo

By Tetsushi Kajimoto

TOKYO (Reuters) – A majority of Japanese firms want top government spokesman Yoshihide Suga to become the next prime minister as many see no need to change the status quo on stimulus policy at least until the coronavirus crisis ends, a Reuters poll found.

Highlighting worry about snowballing public debt, however, fiscal reform topped firms’ wish list for the incoming government, the poll found, underlining the difficulty to contain the virus and revive the economy while putting the fiscal house in order.

Few picked the “womenomics” policy of boosting the role of women in the economy and politics, the survey showed.

Suga, seen as a favourite to succeed Shinzo Abe, who is stepping down due to poor health, is widely expected to win the ruling Liberal Democratic Party’s (LDP) leadership election on Sept. 14. The winner is virtually assured of becoming prime minister with the LDP’s parliamentary majority.

The Corporate Survey found 56% of firms want Suga to become premier, outdistancing the other candidates – former defence chief Shigeru Ishiba and former foreign minister Fumio Kishida.

“We cannot expect major reform but we should aim for economic recovery by extending the status quo,” a machinery maker manager wrote in the survey.

“The health crisis has boosted fiscal spending, and there’s a limit to postponing debt repayment,” wrote a pulp and paper firm manager. “We don’t want to face tax hikes” to repay public debt.

The survey, conducted for Reuters by Research from Aug. 31 through Sept. 9, canvassed 485 large and mid-sized non-financial firms. About 230 firms answered the questions, on condition of anonymity.

In the survey, 85% of firms saw greater benefits than demerits from nearly eight years of the “Abenomics” policy mix of aggressive monetary and fiscal stimulus and reform.

Many companies said they seek no change in economic policy and called for more stimulus as a majority saw no end to the pandemic.

Still, the survey showed fiscal reform topped the agenda, picked by one-third of firms, a sign of growing worry about the industrial world’s heaviest public debt burden.

Fiscal reform was followed by boosting economic ties with other countries and digital transformation.

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