[Consumption Tax Increase] Could be a shock worse than Lehman Brothers.
Hello, this is Gesan.
From October, the world will change.
If we were to name the change with the biggest impact
it would undoubtedly be the consumption tax hike.
From 8% to 10%, when you think about it carefully,
it's only a 2% difference,
but from October onward, you may feel as if you’re losing out
for a while when you shop.
“I want this a little, but taxes have gone up,
so maybe I’ll hold off on buying.”
This is what many people are thinking, and they may reduce their consumption as a result. There will probably be a lot of people who do.
There is also a view that this will deal a certain blow to Japan’s economy,
but… what is really happening?
How much of an effect on consumers does the consumption tax increase have
been projected to have?
The past instances of tax increases provide a rough guide,
but do you remember the conditions at that time?
There is data showing that the impact on the Japanese economy was enormous.
The following is a quote.
↓
“The tax increases in 1997 and 2014 significantly contracted private final consumption,
and the magnitude of the shock was on par with the Lehman Brothers collapse and the Great East Japan Earthquake.
Indeed, more than that,
the dampening effect of consumption due to the tax increase
lasted far longer than the shocks from Lehman Brothers or the Great East Japan Earthquake.”
Takashi Nakano
‘A Mind-Opening, Miracle Economics Class [Basic Knowledge Edition]’
(Bestsellers Publishing)
April 30, 2019 First Edition, First Printing
P.282
＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝
In fact, in “private final consumption,”
the shock from the Lehman collapse or the Great East Japan Earthquake
lasted much longer than those events.
This time, too, the consumption tax could come to cause
a situation similar to the past, but if that is the case,
“From October 1, there could be a Lehman-like economic shock,”
and you would need that level of preparedness,
to say the least.
This isn’t to scare you,
but it is wise to be prepared.
＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝
Will New iPhones be cheaper from October?
＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝
There are other major changes as well.
From October 1, the Revised Telecommunications Business Act
will be enforced. This enforcement will impose restrictions on the sale of smartphones and other devices.
Currently, almost everyone owns a mobile phone,
so this will affect the majority of people as well.
Until now, high-cost smartphones like the iPhone could be obtained cheaply.
That was because the price of the device was subsidized by combining the device cost with the service fee.
The carriers lowered the device price and recovered the cost through the monthly fees.
As a result, even expensive smartphones were affordable for many people.
In particular, for example, switching from DoCoMo to Au,
using the MNP system, you could obtain iPhones quite cheaply.
By the end of August,
there were sensational campaigns like, “Switching gets you an iPhone 8 with the device price split of 5,040 yen,
plus 80,000 yen cashback.”
Such campaigns existed at some mobile shops.
By the way, the iPhone 8 is a model from two years ago,
but it is still quite usable.
Getting it almost for free with cashback is possible…
If you don’t MNP, you’re losing out.
Of course,
you might have to subscribe to paid content
and there are other conditions, but
there were countless extraordinary campaigns.
However, with the enforcement of the ‘Revised Telecommunications Business Act’,
you probably cannot buy new devices cheaply.
From now on, the costs of the service and the device will be separated,
so you cannot sell the devices as a bundle with cheaper service.
This will mean that you cannot market as “device plus service” cheap.
And, until now,
people who could upgrade every two years and get a brand-new device essentially for free
—those who benefited the most—
will no longer have that advantage once the device price and the service are separated,
and those who use cheaper plans and continue to use the same device longer will likely gain more.
If you’re thinking of upgrading soon,
it may be wiser to procure a new smartphone cheaply before October.
Phone costs are a monthly fixed expense,
and when they accumulate, they become a noticeable amount,
so you should smartly utilize the new system and manage wisely.
By the way, on September 10 (US time),
Apple will hold an event.
Some information has already leaked,
and if that information is correct,
the models announced will be
the iPhone 11,
the iPhone 11 Pro,
and the iPhone 11 Pro Max.
CG images of iPhones with three lenses are also circulating.
And as usual, they will be released on September 20.
However, most consumers seem not very interested in the new models.
Many people seem to be already satisfied with current functionality.
They say things like,
“I just want longer battery life and lower price.”
Those voices are also heard.
From October 1,
with the enforcement of the Revised Telecommunications Business Act
and so on,
at least in Japan, iPhone sales may struggle.
＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝
What is important to do to adapt to changes
＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝＝
Thus, the changes such as the “consumption tax increase” and
the “Revised Telecommunications Business Act” will change our lives from October 1,
but where there are changes, opportunities always arise.
Because those who fail to adapt will inevitably fall behind.
This time, too, those who fail to adapt will falter.
So please, do not fear change,
be flexible and adapt.
And seize the opportunities.
To adapt to change, what should you be mindful of?
One hint is to“not lose focus.”
For example, after a 2% tax increase,
every time you shop, you might think,
“Before it was 8%, now it’s 10%…”
and feel a sense of loss.
You’ll feel stressed.
But the fact that the tax increases is not something you can change by any means.
Accepting it quickly is more advantageous.
“What used to cost 10,800 yen may now cost 11,000 yen,”
and so on, thinking about it is a waste of time.
It’s a waste of stress.
Instead of focusing on things you cannot change,
focus on other things that you can change with your own power.
That is important.
“Accept what you cannot change,
and focus on what you can change.”
Please be mindful of that.
Well then, today as well,
thank you for reading until the end.
Thank you.
Keizo Shimoyama
