Kishida's three key policies may backfire

Significance

State finances, companies and households will all feel the effects.

Impacts

• Defence spending will rise to about 2% of GDP, funded by a combination of tax and non-tax revenue.
• Expansion of social insurance payments will be the main funding source for childcare.
• Kishida’s calls for wage increases will produce them among a narrow circle of large companies.
• Most firms, especially small and medium-sized ones, will raise wages only at below current inflation rates.
• Expanding childcare will probably not have much impact on the birth rate.