TOKYO—Prime Minister Shinzo Abe’s policies have benefited the titans of business with whom he likes to play golf but have left millions of people behind, said a former defense minister who is making a long-shot bid to lead the ruling party.
Shigeru Ishiba doesn’t have much of a chance of dethroning Mr. Abe. But he speaks for a larger group—including some people in ruling circles—who play down the healthy economic indicators under Mr. Abe and see risks in his “Abenomics” policies, including cheap money and robust government spending.
“Exporters made money on the cheap yen and monetary easing, and they’re all having fun playing golf at Mr. Abe’s vacation home,” said Mr. Ishiba in an interview in his office in Tokyo, which is filled with model planes and books on military and economic policy.
“Those people are happy but there are many people who aren’t. This country’s economy isn’t sustainable unless we bring happiness to all those other people,” he said.
Mr. Abe, an avid golfer, often plays with executives of companies such as Canon Inc. and Fujifilm Holdings Corp. , and has hit the links three times with a former American businessman, President Trump.
Mr. Ishiba, 61 years old, is challenging Mr. Abe, 63, to lead the ruling Liberal Democratic Party in an election on Sept. 20. The head of the LDP traditionally becomes prime minister when the party controls Parliament—as it does now—so Mr. Ishiba is effectively bidding to lead the nation. Mr. Abe has locked up support from most LDP members of Parliament.
Since Mr. Abe took office in December 2012, his policies and Bank of Japan Gov. Haruhiko Kuroda’s easing have contributed to record corporate earnings and helped create the tightest labor market in decades. Growth has been steady in the past two years and the economy expanded at an annualized pace of 1.9% in the April-June quarter.
At a news conference in July, Mr. Abe reeled off favorable numbers including the results of a survey which showed wage growth at small and midsize companies at its highest level in 20 years. “The Japanese economy is making sure and steady progress,” he said.
Voters aren’t so sure. In a poll released this week by All-Nippon News Network, only 23% of voters thought Abenomics was going well and 57% thought it wasn’t. The same poll, which didn’t provide a margin of error, showed the general public slightly favored Mr. Ishiba over Mr. Abe.
In the slow recovery since the global financial crisis, many politicians have found that improved economic data don’t necessarily translate into robust popularity. The Democratic Party in the U.S. lost control of the Senate in 2014 and the White House in 2016, while German Chancellor Angela Merkel’s party last year recorded its worst result since 1949 in national elections despite strong growth, low unemployment and a budget surplus.
Mr. Ishiba said he wasn’t asking the Bank of Japan to stop its easing policy right away, but he said the policy came with “lots of shadows.”
Recalling a speech he gave to senior citizens in northern Japan, Mr. Ishiba said he asked the audience how it felt about low interest rates. In his telling, attendees responded that because bank deposits in Japan pay virtually no interest, they couldn’t buy gifts for their grandchildren.
Mr. Kuroda, the central bank chief, in 2013 launched what were widely called his “bazookas,” including large purchases of government bonds to drive down interest rates. Mr. Ishiba wasn’t impressed. “If you talk to military experts, they’ll tell you that a bazooka doesn’t fly long distances,” he said.
He said Japan should look for ways to trim its national debt, which stands above a quadrillion yen or nearly $10 trillion, before it is too late, stressing a subject that Mr. Abe avoids.
While the debt is mostly held domestically, the day may come when Japanese people’s savings are tapped out and Japan has to borrow more from foreigners, Mr. Ishiba said. Then interest rates could rise sharply, he said. “It is important to think of ways to bring in more, while we still have the ability to borrow money,” he said.
Comments like these tap into a growing line of thinking in the ruling party, although most lawmakers hesitate to challenge Mr. Abe directly. Former Foreign Minister Fumio Kishida, seen as a potential future prime minister, led a group of lawmakers this year in proposing more steps to control spending.
After two delays, Mr. Abe has said he plans to raise the national sales tax in October 2019 to 10% from 8%. Mr. Ishiba said the tax would eventually have to go higher than 10%.
Mr. Abe is set to open his campaign for re-election as party leader soon. On Tuesday, he was playing golf near his vacation home for the fourth time in the past week.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com