The Straits Times
Published on Nov 23, 2012

Japan's likely next PM says may loosen fiscal discipline for growth


TOKYO (REUTERS) - Japan's main opposition leader and possible next prime minister, Shinzo Abe, said once in power his party would propose a vast 200 trillion yen (S$2.9 trillion) public works package and would not feel bound by the present government's pledge to avoid an increase in borrowing.

In an interview with the Wall Street Journal (WSJ) published on Friday, Mr Abe was also quoted as saying that he would consider postponing sales tax increases agreed in August by his party and the ruling Democrats if the economy continued to be mired in deflation.

"If we judge that we are not on our way out of deflation, I think we would decide not to raise the tax," he said.

Credit rating agencies have said that the tax hikes and commitment to restrain new borrowing were the first, necessary steps to contain Japan's record public debt and avoid credit downgrades.