Abe weathers no-confidence motion over shaky economy

TOKYO — Prime Minister Shinzo Abe easily weathered a no-confidence motion yesterday submitted by opposition parties, as his allies agreed on postponing a sales-tax hike to avoid further shocks to the stuttering economic recovery.

The defeat of the no-confidence motion, by a vote of 345 against to 124 in favour, was a foregone conclusion, thanks to the strong majority Mr Abe’s ruling Liberal Democratic Party (LDP) holds in Parliament. But opposition leaders took the opportunity to renew their attacks on the Prime Minister’s “Abenomics’’ strategy for reviving the economy.

Mr Abe is widely expected to announce today a delay of a planned April 2017 sales-tax hike to 10 per cent from the current 8 per cent. He has been lobbying to delay the increase until October 2019, arguing that the risk of a severe downturn is too high because of uncertainty over the global economy.

Mr Katsuya Okada, head of the Democratic Party, one of four opposition parties that submitted the no-confidence motion, accused Mr Abe of bungling the economy.

“Prime Minister Abe should immediately step down,’’ he said. “He mishandled economic policy, and his Abenomics has failed.’’

Japan’s economy, the world’s third-largest, has been stuck in the doldrums for years. Since taking office in late 2012, Mr Abe has championed a massive monetary easing aimed at vanquishing persistent deflation, which tends to discourage corporate investment and consumer spending.

Data for April showed factory output fell 3.5 per cent from a year earlier and consumer spending also edged lower, while the consumer price index fell 0.3 per cent.

While weak, the latest figures were better than expected, and Mr Abe has won grudging support for postponing the tax hike from a key ally, Finance Minister Taro Aso.

“It is one option to help support consumer spending,’’ said Mr Aso of the likely delay.

With Japan’s public debt at nearly 240 per cent of its GDP, putting the nation’s accounts in order remains an urgent priority.

At a summit of the Group of Seven rich nations last week in central Japan, other leaders demurred at Mr Abe’s insistence that the world economy is on the brink of a crisis at a time when the United States economy is strong enough that the Federal Reserve is preparing to raise interest rates.

But Mr Abe cited G7 backing of the use of all policy tools available to countries as a justification for a tax-hike delay.

Critics have accused Mr Abe of trying to use the event as a smokescreen for the failings of his own policies.

The motion also touched on the Abe administration’s controversial security legislation, former economy minister Akira Amari’s money-for-favours scandal and the largely secret negotiations over the Trans-Pacific Partnership free trade pact signed in February.

The last time Japan raised its sales tax, to 8 per cent from 5 per cent in April 2014, the economy lapsed into recession. Growth has been uneven since then, and Mr Abe initially opted to postpone the increase to 10 per cent, originally set for October 2015, to April 2017. By pushing back the tax increase again, Japan risks having its credit downgraded, though the impact would be limited by the fact that almost all of its debt is owned by domestic investors or the central bank.

It is unclear how Mr Abe will pay for various government spending commitments that were supposed to be financed through the tax increase. Agencies