TOKYO, Jan 19 (Reuters) – Japan’s Prime Minister Sanae Takaichi will call a national election on Feb. 8 to seek voter support for increased spending, tax cuts and a new security strategy that is expected to accelerate defense development.
Takaichi plans to dissolve Parliament on Friday ahead of early voting for all 465 seats in Parliament’s lower house, in her first electoral test since becoming Japan’s first female prime minister in October.
“I am betting my own political future as prime minister on this election,” Takaichi said at a press conference on Monday. ‘I want the population to judge directly whether they will entrust me with the administration of the nation.’
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She promised to suspend the 8% consumption tax on food for two years, adding that her spending plans would create jobs, boost household spending and increase other tax revenue.
The prospect of such a tax cut, which the government estimates would reduce its revenue by 5 trillion yen ($32 billion) a year, caused the yield on Japanese 10-year government bonds to hit a 27-year high on Monday.
Calling an early election allows Takaichi to take advantage of strong public support to tighten his grip on the ruling Liberal Democratic Party (LDP) and strengthen his coalition’s fragile majority.
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The election will test voters’ appetite for greater spending at a time when the rising cost of living is the population’s main concern.
Prices were the top concern for 45% of respondents in a survey released by public broadcaster NHK last week, followed by diplomacy and national security at 16%.
Takaichi’s government plans a new national security strategy for this year after deciding to accelerate a military buildup that will bring defense spending to 2% of GDP, a sharp break from decades in which Japan limited such spending to around 1%.
Takaichi has not set a new spending target beyond that level, but rising tensions with China over Taiwan and disputed islands in the East China Sea, along with U.S. pressure on allies to spend more, are likely to increase defense spending.
“China has held military exercises around Taiwan, and economic coercion is increasingly being used through control of important supply chain materials,” she said. ‘The international security environment is becoming more severe.’
Last week, China banned exports of items destined for Japan’s military that have civilian and military uses, including some essential minerals.
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The LDP and Ishin go into the February 8 election, which coincides with a planned national election in Thailand, with a combined total of 233 seats. Takaichi said his goal is for the coalition to maintain a majority in the lower house.
