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Tokyo Gov. Yuriko Koike, head of the new Party of Hope, announces the group's platform on Oct. 6.
Politics

Koike's 'Yurinomics' includes vow to tax Japan Inc. cash hoards

Party of Hope platform counters Abe's monetary and fiscal stimulus

KENTARO IWAMOTO, Nikkei staff writer | Japan

TOKYO -- Tokyo Gov. Yuriko Koike on Friday said her new national party would tax retained earnings at major companies if it wins Japan's general election on Oct. 22.

Koike's Kibo no To, or Party of Hope, which is challenging Prime Minister Shinzo Abe's ruling coalition, included the plan in an election platform announced the same day. The platform summarizes the governor's economic policies, dubbed "Yurinomics," by which the party aims to achieve both economic growth and fiscal restoration.

The platform is light on detail. But in stark contrast to Abenomics, Yurinomics would shift away from Abe's heavy reliance on monetary easing and fiscal stimulus to prop up the economy. Instead, the Party of Hope would seek to mobilize the private sector.

The platform flatly rejects Abe's plan to raise the consumption tax to 10%, from 8%, in October 2019: "There is no feeling the economy is growing. If the hike is enforced, the economy will likely lose momentum."

The idea of taxing corporate cash piles is presented as a way to secure extra funds while shelving the consumption tax hike -- allowing the government to still improve Japan's fiscal balance.

Koike told a news conference that large corporations are sitting on more than 300 trillion yen ($2.65 trillion). If companies want to avoid the tax, they would have to use their funds -- pressure the party believes could help invigorate the economy.

The tax "would have effects if companies use their reserves for new investments and building in-house child care facilities," Koike said.

Other Yurinomics measures include the introduction of a basic income system, aimed at increasing the disposable funds of the lower-income segment. The party has not said how it would pay for this.

As for energy policy, the party wants to eliminate nuclear plants by 2030 -- and add a prohibition on nuclear power to the constitution so that future governments will not reverse the move. Koike did not reveal a specific schedule for phasing out the plants but said the party would draw up a road map. 

Like Abe's Liberal Democratic Party, Koike's camp is promising constitutional reform. Amending the document requires agreement by at least two-thirds of lawmakers in both houses of parliament.

On national security, the Party of Hope platform touches on a review of the Japan-U.S. Status of Forces Agreement. Koike, a former defense minister, said the relocation of the U.S. Marine Corps Air Station Futenma in Okinawa to the island's Henoko area should move forward. This could trigger opposition from Okinawa residents, many of whom want the base moved off the island entirely.

The party's pledges also include selling national assets, offering free preschool education and passing a law to ban discrimination against LGBT individuals.

On top of its key policies, the party has also produced an eclectic list of "12 things to be reduced to zero," from overcrowded trains and passive smoking to food waste, hay fever and telephone poles.

At the news conference, Koike reiterated that she does not intend to run in the election herself.

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