(Bloomberg) -- Japanese Prime Minister Fumio Kishida said he’d press ahead with labor market reforms to create an environment for sustainable pay rises in a policy-setting address to a new parliament session, which is clouded by inflation hitting its highest level since 1981.

Kishida told lawmakers Monday that he would push for a labor shakeup to enable a smooth flow of workers into growth industries. The premier told lawmakers he wants to see more workers becoming employees with full benefits, skills being upgraded and pay based on job responsibilities rather than years of service. 

The government will unveil a blueprint for “job-based” pay by June, he said, calling the shift a matter of urgency for corporate growth. “Regardless of age and gender, we will set up a system to provide support straight through from reskilling to changing jobs. We’ll look at retraining from a longer-term perspective,” Kishida said.

Another key item for the parliament session will be pushing through Japan’s biggest increase in defense spending since its defeat in World War Two.

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Kishida has seen his voter support slump to record lows in several polls over the past few months, with rising prices for items such as food and fuel hurting household budgets, adding to mistrust over a series of cabinet scandals. While he need not face a general election for more than two years, lack of public popularity could make it harder for him to control his ruling Liberal Democratic Party. 

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A poll by broadcaster ANN carried out over the weekend found support for Kishida’s cabinet at 28.1%, down 3 percentage points and a new low since he took office in October 2021. A separate survey by the Asahi newspaper carried out at the same time found 73% of respondents said they didn’t have positive expectations for his economic policies. 

Kishida also made the following comments:

  • Won’t hesitate to take necessary steps to tackle inflation
  • Pay will be raised in the public sector and companies supplying the public sector
  • Pay rises higher than inflation are needed
  • Funding of an increase in the defense budget will be dealt with as a matter of responsibility to future generations

--With assistance from Takashi Hirokawa.

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