To keep the economy above water the Government has spent lavishly. But it has spent unwisely, wasting money on unproductive public works, such as damming rivers and paving riverbeds. This has helped keep unemployment down to 4.9 per cent. But even that is a record high. Such expenditure has been mainly to the benefit of the construction industry, the shadowy force which has had much to do with keeping the Liberal Democratic Party in power for most of the postwar period.
Japan needs a break from the past, younger people in politics and business.
The need to break the LDP's one-party dominance has been recognised for decades. But as long as the economy kept functioning well, political reform never became imperative. Now, with chronic recession and a descent into deflation, a double crisis, resolvable only by both radical economic and political change, could overtake Japan. In the short term, no foreseeable change by Japan is likely to have a fatal impact on the Australian economy. Australian exports of coal and iron ore are assured by contracts, priced in US dollars and recently renewed.