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Wednesday, Feb. 29, 2012

Noda tax quest one dimensional?

Opposition may agree but also have one-track goal: election


Staff writer

Prime Minister Yoshihiko Noda has cleared numerous political hurdles since taking office in September, but his goal of raising the consumption tax and reforming the social security system may prove insurmountable as he wages a two-front battle.

News photo
Hot-button issue: Prime Minister Yoshihiko Noda appears last week before the Lower House Budget Committee with Finance Minister Jun Azumi. KYODO

Noda faces rebellion from within the ranks of his ruling Democratic Party of Japan in March when the Cabinet plans to approve contentious bills to raise the 5 percent consumption tax.

In summer, the opposition-controlled Upper House will likely block the proposed legislation, according to analysts.

Losing either battle may force Noda to dissolve the Lower House and call an election to break the stalemate, the analysts say.

Noda will pay keen attention to public support rates for his Cabinet before opting to play "the election card," said Tomoaki Iwai, a political science professor at Nihon University.

The Cabinet on Feb. 17 adopted the reform outline to double the consumption tax by 2015.

Noda has said his main mission is to raise the levy and reform the social security system in the face of a fiscal crisis, staking his Cabinet's fate on the unpopular bills.

"I'll achieve (the reform) with unflagging will. So I want to ask you all again to support us," Noda said on a video posted on the prime minister's office website on Feb. 17.

But Noda's tax crusade faces daunting odds.

The opposition camp, led by the Liberal Democratic Party, is bent on forcing Noda to dissolve the Lower House and call an election, even though the LDP in its own platform had advocated doubling the consumption tax. Noda's foes are trying to exploit his falling Cabinet support rate, which sagged to 29 percent in a Feb. 19 poll by Kyodo News.

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Spoiler?: Liberal Democratic Party President Sadakazu Tanigaki faces reporters in September after selecting his party executive team to fight the Democratic Party of Japan-led government. KYODO

Noda's DPJ-led government had hoped to win approval from opposition forces before submitting the tax and social security bills by holding advance negotiations over the contents of the legislation.

But smelling blood in the falling Cabinet support rate, the LDP and New Komeito have snubbed overtures for advance policy talks and insist debate only be held in open Diet sessions.

The DPJ doesn't control the Upper House and needs the opposition's nod to have its bills clear the chamber.

The DPJ even took the opposition-demanded tack of spelling out how much the consumption tax must be hiked to cover the pension reform program, but this failed to win any converts.

The LDP and New Komeito are more determined than ever to oust Noda. They have even signaled they will oppose a special government-sponsored bill to issue the deficit-covering bonds needed to cover as much as 40 percent of the ¥90.3 trillion fiscal 2012 budget.

If the bond bill is delayed or killed, it would deal a severe financial blow to the government. Last fall, the DPJ barely managed to get the opposition to approve the bond bill, and then only after Naoto Kan promised to step down as prime minister.

"(The LDP) won't cooperate with the DPJ until the last minute," said Naoto Nonaka, a political science professor at Gakushuin University.

"It's their usual tactic to keep pushing the DPJ until they accept anything the opposition says," Nonaka said.

The LDP should not just oppose everything the ruling party wants, he said.

The shoe was on the other foot when the LDP was in power and struggled under the same opposition boycott tactics, at the time led by the DPJ and other parties outside the ruling bloc that had control of the Upper House.

The LDP found itself slamming the DPJ for opposing any ruling camp policy proposal.

"The (LDP) experienced the same situation when it was in power, but it seemed to have learned nothing" more than how to paralyze the government, Nonaka said.

Besides the opposition camp, Noda faces a pressing need to defuse the brewing animosity toward him in the DPJ.

Many members, most of them followers and allies of disgraced party leader Ichiro Ozawa, are against the consumption tax hike.

Most of Ozawa's followers are young lawmakers with weak election-backing machines who fear losing their seats in the next election in a voter backlash against the Noda administration.

During a recent interview with the Asahi Shimbun, Ozawa again issued a veiled threat to leave the party, along with his cohorts, if Noda doesn't drop his tax hike quest.

"You can't win the understanding of the people. I cannot support a tax increase," Ozawa was quoted as saying.

Ozawa has been on trial for his alleged role in falsifying the annual accounting reports of his political fund management body.

He appears to be trying to stage a political comeback by taking advantage of the unpopular tax reform issue.

Tadashi Hirono, an Upper House lawmaker and close ally of Ozawa, stepped down as a chairman of the chamber's public relations committee in early February, saying he couldn't promote the tax hike plan. The month before, nine DPJ members close to Ozawa left to form Kizuna, a new party.

The question is how many more will follow Ozawa in opposing Noda's tax reforms.

Ozawa's sway over his followers appears on the decline as his money scandal drags on.

The Tokyo District Court is expected to rule in Ozawa's trial in April. The outcome and subsequent public reaction may be key factors in the Nagata-cho power balance.

Professor Iwai of Nihon University speculates that the rebels following Ozawa may be shrinking. "Ozawa is losing his power. About 60 to 70 rebels are needed to pass a no-confidence motion (against Noda) in the Lower House, but no more than 30 members are likely to vote for it."

Meanwhile, the LDP has been putting pressure on Noda to call a spring election, partly because the political group Osaka Ishin no Kai (One Osaka), headed by Osaka Mayor Toru Hashimoto, may have candidates lined up if a Lower House campaign comes next summer, according to Iwai.

The group's popularity is soaring while support for both the DPJ and LDP is declining.

"So whether Osaka Ishin no Kai will be cooperative with the DPJ may also influence the Nagata-cho power game," Iwai said.



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