A bill cutting the consumption tax on food for two years and paying support money to low- and middle-income workers passed the Lower House Financial Affairs Committee on the 6th, with the Liberal Democratic Party and Nippon Ishin no Kai voting in favor. It was expected to clear the full Lower House in the afternoon session. The bill now moves to the Upper House with the effects of the cut still questioned and the money to pay for it unexplained.
The cut is a long-standing goal of Prime Minister Sanae Takaichi, who has called it a cherished ambition. Over two years it would cost about ¥10 trillion, and no source for that money has been made public. The support payment is also short on detail.
Prime minister pressed on prices
When debate on the bill opened at a Lower House plenary session on October 20, Takaichi argued for the cut on cost-of-living grounds.
“Rising prices in recent years, centered on food, have placed a heavier burden on low-income households, and support for daily necessities is important.”Sanae Takaichi, prime minister
What the Diet questioned was whether the cut would work as the inflation measure she has stressed. The government has not shown how much of the tax reduction would reach shoppers as lower prices.
What happens next
The bill goes to the Upper House, where the same questions about cost and effect are likely to follow it. The support payment's eligibility has been only loosely defined in debate.