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Wednesday, May 14, 2008

Road-tax bill clears Diet

Opposition hits Cabinet-ruling bloc split on revenue role, forced vote

Staff writer

The ruling bloc rammed a bill through the Diet on Tuesday that allows the government to use road-related taxes solely for nationwide road construction for the next 10 years, even though the Cabinet agreed earlier in the day to free up those revenues starting next April.

News photo
Seats of contention: Diet members attend a plenary session of the Lower House on Tuesday where the controversial road-tax bill was endorsed. KYODO PHOTO

The Democratic Party of Japan-led opposition camp condemned the bill as being totally inconsistent with Prime Minister Yasuo Fukuda's promise to free up road tax revenues, currently used exclusively to fund road construction, for general expenditures starting in fiscal 2009.

Even members of the ruling bloc expressed reluctance over voting on the bill.

The bill was rejected Monday by the opposition-controlled Upper House and sent back to the Lower House for a second vote. Article 59 of the Constitution stipulates that a bill rejected in the upper chamber can be approved with a two-thirds majority vote in the House of Representatives, as happened Tuesday.

Since the opposition seized control of the House of Councilors in last July's election, the ruling bloc of the Liberal Democratic Party and New Komeito has used the two-thirds vote three times.

In an attempt to reaffirm Fukuda's pledge, the Cabinet earlier Tuesday endorsed a plan to free up revenues from the road-related taxes starting in fiscal 2009, which starts next April. The Cabinet plan calls for the current system to end with drastic tax reforms slated for the end of this year.

"For the current fiscal year, we had already earmarked the road-related taxes (for road construction)," Chief Cabinet Secretary Nobutaka Machimura said in the morning. "But the term of validity is one year."

By clarifying the one-year period of validity, instead of the 10 underscored in Tuesday's bill, the Cabinet appeared to be trying to appease the opposition. The ruling bloc didn't want to touch the bill, fearing further controversy.

DPJ deputy chief Naoto Kan slammed the contradiction between what the Cabinet agreed on and the bill's parameters.

"This is completely incoherent. (The Fukuda Cabinet) said it would free up the road-related tax revenues, (but then the ruling bloc passed the) bill to continue earmarking revenues for the next 10 years," Kan said. "The Cabinet itself just denied its own endorsement" by letting the Diet pass the bill.

Fukuda and New Komeito leader Akihiro Ota agreed in April to draft a bill by year's end officially stipulating that road-related taxes would be used for general purposes. But Machimura said its details and the timing of its submission to the Diet have yet to be determined.

A Cabinet endorsement "is just a conclusion reached by the Cabinet," said DPJ Diet affairs chief Kenji Yamaoka. "If the Fukuda administration changes," it's possible the Cabinet decision will be nullified.

The Cabinet also said Tuesday that it would hold discussions on the provisionally added tax rates on gasoline and other auto-related levies. But Fukuda has pointed out that no other country is lowering gasoline prices, especially from the standpoint of the need to address climate change.

Gasoline taxes and the road construction budget have been key issues in the current Diet session, which ends June 15.

Amid strong protests from the DPJ, the "provisionally" added rates on gasoline and other auto-related taxes expired temporarily at the end of March, bringing down pump prices by about ¥25. The rates were imposed in the 1970s as a temporary step but have been in place ever since.

But one month later, the ruling bloc used its two-thirds majority in the Lower House and reinstated the higher rates for another 10 years, drawing harsh public criticism.

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The Japan Times

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