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Abe’s third term as Japan’s Prime Minister may be his hardest yet

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After two terms of mixed reform results, Prime Minister Shinzo Abe is vowing to tackle some of Japan's most chronic challenges in the third.

[TOKYO] After two terms of mixed reform results, Prime Minister Shinzo Abe is vowing to tackle some of Japan's most chronic challenges in the third.

Mr Abe is heavily favoured to win a Sept 20 vote to lead the ruling Liberal Democratic Party for another three years, with one local newspaper poll showing 87 per cent of eligible lawmakers favoring his return. The prime minister and his only rival, former Defense Minister Shigeru Ishiba, were expected to declare their candidacies at 10am Friday in Tokyo - the official start of the campaign.

In recent weeks, Mr Abe, 63, has signalled plans to follow his "Abenomics" policies of monetary easing, fiscal stimulus and structural reform, with a more controversial agenda. Those plans - such as admitting more foreign workers and amending the pacifist constitution - will have to overcome a popular reluctance to disrupting a period of relative peace and prosperity.

"Abenomics has been gradually running out of steam," said Masaaki Kanno, chief economist for Sony Financial Holdings Inc. "Most of the world is trying to maintain the economy as it is, and that may be what the public wants. So doing anything drastic may be a high hurdle."

Here's a look at Mr Abe's agenda:

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Spooked by a labour shortage crippling sectors such as elderly care, Mr Abe's pushing to crack open Japan's restrictive immigration laws. He's pledged to create a new residential status for lower-skilled foreign workers next year that would accept labourers for limited stays without their families. The existing foreign "intern" system has been dogged by allegations of forced labour. In an essay published by Hanada magazine last month, Mr Abe said foreign workers must be paid the same as their Japanese counterparts and be protected from exploitation. Still, he argues it's not "immigration" because they can't stay.


Jobs for life could become more common in Japan, if Mr Abe gets his way. In an interview with the Nikkei newspaper this week, the prime minister said he wanted to focus the next year on creating an environment for people to stay working throughout their lives. That could mean bolstering opportunities for mid-career job changes and encouraging people to stay on past 65. Japan already has a relatively high proportion of elderly workers, including about 30 per cent male and 16 per cent of female senior citizens.


Mr Abe's counting on keeping more elderly people in the labor force in year one of his next term. Because it's essential to healthcare and social security overhauls he's planning in years two and three. Mr Abe told the Nikkei that he was considering allowing workers the option of delaying pension payouts past the age of 70, in exchange for higher monthly payments when they do. The Japanese already have among the world's longest life expectancies - at about 87 years for women and 81 years for men - and Mr Abe said he wants to promote lifestyle incentives to lengthen healthy life spans.


Mr Abe is also seeking to raise the consumption tax to 10 per cent from the current 8 per cent in October of next year. The last increase to 8 per cent in 2014 triggered a recession, leading Mr Abe to twice delay a second hike. Mr Abe told the Nikkei that measures like exempting food from the next increase would help deflect another economic hit.


Mr Abe pledged in a policy pamphlet distributed to party lawmakers ahead of the election to push ahead with a controversial plan to change the pacifist provision of the country's postwar constitution. He said he would seek to present the LDP's amendment to the next session of parliament and push for an early vote. The plan faces a rocky road: Natsuo Yamaguchi of Mr Abe's coalition partner, the Komeito Party, said last month he didn't think there had been much progress on consensus-building to support the plan.


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