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Business

Abe says it's too risky to raise sales tax now

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Opening sequence

Business

Abe says it's too risky to raise sales tax now

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COMING UP:Abe says it's too risky to raise sales tax now

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Transcript

00:00:00
>>
FOREIGN]
> Another blow for Shinzo Abe's plan to rescue Japan's economy. The prime minister announcing Wednesday he's pushed back a planned hike in sales tax for the second time. Abe's says upping the tax would be too risky right now, and he could be right. The country slipped back into recession after the last hike in 2014.
00:00:19
But, critics say the latest delay shows that the so-called Abenomics reforms are not working. Economists telling Reuters' Stanley White that they fall short of what the country really needs.>> There's a sense that Abe has not done enough to deregulate the areas of the economy that need to be deregulated.
00:00:36
And I think there's also some concern about increasing corporate productivity. There's some also some concern that Abe has relied too much on the Bank of Japan is monitored too easily and has relied too much on a weak yen to stimulate the economy. What we've come to find is that these factors did some benefit, but this is not the long term solutions to Japan's problems.
00:01:00
>> News of the delay has also raised some serious questions about how Abe plans to fund Japan's ballooning welfare programs or how he's going to reach his goal of a budget surplus by 2020.>> It's a huge setback. Economists that we've spoken to, so that this basically puts this goal out of reach.
00:01:17
So the government does have to come up with something that it can say in public to at least give the image or the impression that it will somehow eventually take steps toward fiscal consolidation.>> In the mean time, Abe till pushing ahead with reforms. Boosting wages and getting more women into the workforce are both on the cards.
00:01:37
Although economists say these moves are a long way off the bold reforms Abe needs to deliver to kickstart Japan's economy after decades of stagnation.