Scandal-hit minister Kazuo Yana now accused of election violation

Opposition lawmakers pressed Prime Minister Sanae Takaichi on Tuesday over whether her economic policies would relieve cost-of-living burdens on households, as allegations of an election law violation leveled against a newly appointed member of her Cabinet took center stage at a Lower House budget committee hearing.

Takaichi defended her plans to stimulate domestic investment and temporarily cut the consumption tax on food while declining to judge whether farm minister Kazuo Yana’s election campaign earlier this year had violated the law.

The exchanges came as the government seeks parliamentary approval for a bill to reduce the food tax rate from 8% to 1% for two years beginning in April 2027. The legislation, submitted Friday, also provides for income-linked payments.

The opposition Democratic Reform Party’s (DRP) policy chief, Takayuki Ochiai, questioned whether the administration was doing enough to channel strong corporate profits into household incomes, arguing that investment and the distribution of economic gains deserved equal attention.

He urged Takaichi to explain how stronger growth would translate into higher incomes. 

“Otherwise, Sanaenomics will not succeed,” he said, referring to the prime minister’s economic program.

Takaichi said greater investment and higher wages are both essential, but identified insufficient domestic investment as a central weakness of Japan’s economy.

“What is lacking is domestic investment. That is overwhelmingly insufficient,” she said.

The prime minister described a cycle in which investment would raise the economy’s growth potential, create better jobs and incomes, strengthen consumption and increase tax revenue. Her approach, which she calls “responsible proactive fiscal policy,” aims to improve living standards while maintaining sustainable public finances.

The government’s growth strategy identifies 17 priority fields for investment. Takaichi said an implementation plan would be drawn up by year-end to clarify the path for domestic investment over the next five years.

Komeito’s policy chief, Hiromasa Nakano, challenged Takaichi on whether the proposed food-tax reduction would actually ease the burden of rising prices.

Takaichi said she expects the reduction to be reflected in retail prices, citing views expressed by retailers during consultations on the proposal.

She put the annual loss of national and local tax revenue at approximately ¥4.3 trillion ($27.2 billion). Dividing that amount by the country’s population would imply annual relief of about ¥36,000 per person, or ¥72,000 for a two-person household, she said.

The prime minister acknowledged that other factors also influence retail prices, making precise forecasts difficult, but emphasized that high food prices and their disproportionate impact on low-income households made action necessary.

Tuesday’s parliamentary hearing also scrutinized Yana, already under pressure over remarks he made at a May meeting of his local Liberal Democratic Party branch claiming he had cut roadworks funding for municipalities whose leaders did not support him during February’s Lower House election. The agriculture minister, who Takaichi appointed last month, has retracted those remarks and apologized, while denying that he sought the cuts.

During the afternoon session, DRP lawmaker Tatsumaru Yamaoka raised the provision of free shuttle buses to supporters attending the launch of Yana’s election campaign in January. Citing election guidance, which states that the transportation of voters to attend a candidate’s speech could constitute an unlawful benefit, Yamaoka noted that Yana’s campaign had recorded ¥235,400 in bus expenses.

Yana had told the morning session that his staff had consulted the election commission before hiring buses for supporters and recorded the cost as a venue expense. He denied providing an improper benefit, saying the service was needed because parking was limited at the venue and many attendees were elderly.

The prime minister declined to draw a conclusion over whether the arrangement had violated the Public Offices Election Law, citing lack of sufficient information.

“Even after listening to this morning’s exchanges and the questions and answers just now, I cannot see the whole picture,” she said.