Top manager Motegi enters the race for Japan's ruling party and promises “no tax increases”

Toshimitsu Motegi, the number two in Japan's ruling party, announced his candidacy for chairman and the post of the next prime minister on Wednesday, promising “no tax increases,” apparently in an effort to draw a sharp contrast with outgoing party leader Fumio Kishida.

Motegi, the fifth Liberal Democratic Party candidate running in the Sept. 27 election, said he would not raise taxes or health insurance contributions to secure funds worth 1 trillion yen ($6.9 billion) each, part of an already formalized government plan that includes a significant increase in spending to bolster Japan's defense and child care.

Tax increases are unpopular with voters and the Japanese economy is lacking strength amid rising prices for everyday goods. Motegi said he was confident the necessary funds could be secured from other sources, but his comments immediately sparked backlash from his LDP colleagues.

As secretary general of the LDP and head of one of its influential inner-party groups, 68-year-old Motegi was a key supporter of Kishida. But since a political funding scandal came to light late last year that rocked the party, relations between the two are likely to have cooled.

“I am determined to deliver results. I will form a stable government that can firmly address changes at home and abroad,” Motegi said at a news conference as he announced his first presidential candidacy for the LDP.

The Harvard graduate and former McKinsey consultant said he sees untapped potential in Japan and vowed to promote economic growth. If elected LDP leader and thus prime minister, he would not raise taxes and would declare an official end to the deflation that has plagued the country for years “within six months.”

“If no results are visible in three years, I will take responsibility as chairman,” he said.

Under Kishida, the government decided to increase Japan's defense spending to 43 trillion yen over five years to better respond to security threats posed primarily by an assertive China and North Korea's missile and nuclear development. Part of the increase will be financed through tax increases, but the government and ruling parties have not yet agreed on the exact timing.

Another priority for Kishida is expanding childcare to reverse the declining trend in the birth rate. As a source of funding, the government came up with the idea of ​​asking people to contribute in the form of monthly health insurance premiums.

Japan's chief government spokesman Yoshimasa Hayashi said both agreements were “necessary to fundamentally strengthen our defense capabilities and child care,” and told a regular press conference that the government would proceed according to plans already approved by the Cabinet.

Hayashi, 63, who served as Kishida's right-hand man, is also running for LDP chairman as his boss steps down at the end of his three-year term.

The ruling coalition of the LDP and Komeito Party controls both houses of parliament, making it almost certain that the next LDP leader will also become prime minister.

Motegi has held important government positions, including foreign minister and industry minister, and is considered one of the most promising candidates for the post of prime minister.

He played a key role in negotiating a trade agreement with the United States when then-US President Donald Trump criticized his country's massive trade deficits with Japan.

Following the political funds scandal that caused several of the party's factions, including one led by Motegi, to disband, the LDP faces the urgent task of regaining voters' trust.

Motegi promised to ensure transparency in the procurement and use of the LDP's funds and to form a “completely new” party.

From the cabinet, 61-year-old Digital Minister Taro Kono, a political outsider who was defeated by Kishida in the last election in 2021, has already thrown his hat into the ring.

Former environment minister Shinjiro Koizumi, a 43-year-old rising star of the LDP, plans to declare his candidacy on Friday, while former defense minister Shigeru Ishiba, 67, announced last month that he would run for the LDP chairman post for the fifth and “final” time.

Both fare well in opinion polls about who the public would like to see as Japan's next head of state.

Former Economic Security Minister Takayuki Kobayashi (49) is also running, and his successor, Sanae Takaichi (63), is expected to announce her candidacy next week.