Japan PM hints at tax delay with economic 'crisis' comment

Speculation mounted in Japan today that Tokyo may delay an upcoming sales tax hike, after Prime Minister Shinzo Abe said the global economy faces a looming "crisis" similar to that in 2008.
Tokyo is scheduled to raise the sales tax from eight to 10 per cent in April 2017 to help pay down one of the biggest debt loads among rich nations.
Abe has previously made clear that his government will only push back the long-planned consumption tax hike in the event of "a grave situation" -- on the scale of the collapse of Lehman Brothers or a major earthquake.

But at a plenary session of the two-day summit of Group of Seven (G7) leaders yesterday, Abe argued that the global economy faced a risk of falling into a "crisis", drawing comparisons with the mood in 2008, just months ahead of the collapse of Lehman Brothers.
A day after the comment, mainstream Japanese newspapers reported that the PM has decided to push back the tax hike plan.
Abe will meet with his Finance Minister Taro Aso and head of junior coalition partner Natsuo Yamaguchi this weekend to confirm the delay decision, the Yomiuri and Asahi national dailies reported.

But speaking at a news conference at the G7 summit today, Abe himself told reporters, "I haven't made a decision at this point," saying he will come to a conclusion before an upper house election due in July.

Top government spokesman Yoshihide Suga also said today the government would "make an appropriate decision at an appropriate time," skirting around reporters' questions about Abe's intentions.
Tokyo's last sales tax rise in April 2014 -- the nation's first in 17 years -- was blamed for stalling a nascent recovery and pushing Japan into recession from which it has barely recovered.
Critics of a delay say Japan must increase tax revenues in the face of soaring debts and to pay for the ballooning cost of welfare as the population ages.
Government coffers are deep in the red, with public debt standing at twice the size of the economy -- the worst among industrialized economies.