Prime Minister Fumio Kishida pledged Monday to take steps over the next three years, including tax cuts, to rejuvenate the Japanese economy that has been stifled by the combination of high inflation and tepid wage growth.

In his policy speech at an extraordinary parliamentary session, Kishida also committed to bolstering Japan's supply capacity to create growth in the economy with the aid of sustainable wage rises and robust investment.

"Economy, economy, economy. I will give top priority to the economy above all else," Kishida said. "I will tackle the challenges facing the nation, including rising prices, with unwavering determination and will provide definite solutions without delay."

Prime Minister Fumio Kishida delivers a policy speech during a House of Representatives plenary session in parliament in Tokyo on Oct. 23, 2023. (Kyodo) 

Kishida's speech, on the second sitting day of the session that began Friday, came as approval ratings for his Cabinet have plunged to their lowest levels since he took office in October 2021. Escalating public frustration over cost-push inflation that has outpaced wage growth has been at the core of the discontent.

He has voiced willingness to map out a new economic stimulus package by the end of October and to submit a supplementary budget for the fiscal year through March 2024 to fund it during the extraordinary Diet session scheduled to conclude on Dec. 13.

To grapple with energy price increases driven in large part by Russia's invasion of Ukraine in February 2022, Kishida said the government will extend subsidies for gasoline, electricity and gas, originally supposed to expire at the end of this year, until spring.

Kishida also emphasized the importance of "standing by" low-income earners who have experienced the "greatest hardship" as a result of higher costs, vowing to offer additional financial assistance through local authorities.

On Friday, Kishida, who has been criticized for supporting tax hikes, instructed his Liberal Democratic Party and its junior coalition partner Komeito to consider how to return government revenues that have steadily climbed in recent years.

Japan's tax income reached 71.14 trillion yen ($474 billion) for fiscal 2022, hitting a record high for the third consecutive year, according to the Finance Ministry.

The support rate for Kishida's Cabinet slid to 32.3 percent in the latest Kyodo News poll in mid-October, with nearly 60 percent of respondents saying they are skeptical about how effective a stimulus package will likely be in buoying the world's third-biggest economy.

In his speech, Kishida said his government will implement tax breaks for companies intending to raise salaries for employees, but did not address any plan to restore Japan's fiscal health which is the worst among advanced countries.

Despite revealing a plan to cut corporate tax for some, the Kishida administration had previously decided to increase tobacco and other taxes to cover its plan to almost double Japan's annual defense spending to around 2 percent of gross domestic product over the next five years, on par with members of NATO.

Prime Minister Fumio Kishida delivers a policy speech at parliament in Tokyo on Oct. 23, 2023. (Kyodo)

On Monday, Kishida did not elaborate on when his government will start the hikes, saying only that the timing will be determined based on the economic situation.

Aside from fiscal matters, Kishida promised to deal with hurdles related to the full introduction of "ridesharing" activities in which individuals are permitted to use personal vehicles as private taxis in hopes of addressing a shortage of taxi services in rural areas.

On the diplomatic front, Kishida expressed his readiness to promote "summit-level talks" with China, repeating his government's mantra that Japan will aim to build a "constructive and stable relationship" with its neighbor.

With Sino-Japanese ties strained in the wake of the first release of treated radioactive water from the crippled Fukushima nuclear power plant in August, Kishida said Tokyo will continue urging Beijing to lift its total ban on Japanese seafood imports.

Regarding North Korea, Kishida said he will make a decision on how to establish "fruitful relations" with Pyongyang "from a broad perspective," reiterating his eagerness to have an in-person meeting with leader Kim Jong Un to resolve bilateral issues.

Kishida also said Japan will craft a new "cooperation vision" for its ties with the Association of Southeast Asian Nations over the next five decades. He is slated to host a special summit with ASEAN leaders in December in Tokyo to mark 50 years of friendship.

While the ruling LDP had proposed Kishida's policy speech should be made on the first day of the session in accordance with custom, the opposition bloc rejected it, saying he could use the opportunity to make a pitch to voters before Sunday by-elections.

Earlier Monday, Kishida told reporters that he has "sincerely accepted" the outcome of the national polls in which the LDP lost one of two seats up for grabs, both of which the party had held before the contests.

Asked about the possibility of dissolving the House of Representatives for a snap election by the end of this year, Kishida said he has to focus on urgent domestic and global challenges, adding that he is "not thinking beyond that at this moment."

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