The economic policies of Japanese Prime Minister, Shinzo Abe, threaten to lead pensioners to disaster in the country of the Rising Sun, in as much as increases in consumption taxes puts them in an unfortunate situation.
This month came into force increases of value added tax (VAT) and pension cuts, two of the pillars of the so-called ‘Abenomics’ to bring the nation out of the 15 years of no growth in the Gross Domestic Product (GDP).
With a public debt twice higher than GDP, the government decided to reduce subsidies for food and public services, in order to restore the coffers of the third world economy.
Complaints and protests also started, particularly those received by an association of lawyers opposed to such cuts that offers counseling to people dependent on government assistance or in economic hardship.
The number of Japanese with a pension shows a spiralling increase and last January almost two million 200 thousand were counted.
Shinzo Abe promised that from spring, there will be an increase in wages which will lead to higher consumption.
However, a survey by the Kyodo agency showed that nearly 70 percent of respondents said the opposite, that is, they will curb their expenses because of the VAT increase which rose from five to eight percentage points. (PL)