Wednesday, June 27, 2012

One party, two minds: Former Democratic Party of Japan President Ichiro Ozawa hands his "no" ballot to an official in the Lower House on Tuesday during a Diet vote on social security and tax reform bills. Right: Prime Minister Yoshihiko Noda applauds as the bills are passed. KYODO

By NATSUKO FUKUE and MASAMI ITO

The Lower House on Tuesday passed Prime Minister Yoshihiko Noda's key bill to double the 5 percent consumption tax by 2015 and other social security legislation, but 57 members of the Democratic Party of Japan, which he heads, voted against it, dealing a further blow to his already reeling Cabinet.

The rebels were led by DPJ heavyweight Ichiro Ozawa, who has fought a power struggle against Noda. But Ozawa stopped short Tuesday of saying if he will bolt from the DPJ and form a new party, apparently wary that this could backfire with voters.

"We'll look for the best option by examining various angles," Ozawa was quoted by Shozo Azuma, a follower, during the closed-door meeting attended by more than 40 DPJ Lower House and 10 DPJ Upper House members. Last week it was reported that Ozawa was collecting letters of resignation from his DPJ allies.

Ozawa also said he hoped voters watched the televised Lower House vote on the consumption tax hike and come to side with his opposition to the increase, according to Azuma.

Later in the day, Ozawa met with reporters and said he will "soon make a decision," without further elaborating.

Noda's ruling camp thus avoided the immediate departure of Ozawa and his cohorts and the threatened loss of the DPJ's Lower House majority — at least for now.

But with the Ozawa-fueled rebellion, Noda will have to further rely on the Liberal Democratic Party and New Komeito, two opposition parties that voted for the tax bill, which has now been sent to the opposition-controlled Upper House.

Noda faces more tough hurdles in the current Diet session, which has been extended until early September, in passing other key bills such as a special measure to issue deficit-covering bonds to cover 40 percent of the ¥90.3 trillion fiscal 2012 budget. The support of the two opposition parties is a must for Noda.

If more than 54 members leave the DPJ, the ruling camp would lose its majority in the 480-seat Lower House and critically damage Noda's administration. About 40 DPJ members have already agreed to follow Ozawa if he decides to bolt and form a new party, according to media reports.

"We have to do our best to establish a new DPJ," Azuma said before the Lower House vote. "We're ready to leave the party. We have been preparing for that."

About 20 DPJ members reportedly abstained from voting for the tax and social security bills.

After the voting, DPJ Secretary General Azuma Koshiishi said he and Noda will decide what punitive measures should be slapped on the rebels who voted against the tax bill. Koshiishi, however, has been reluctant to mete out harsh punishment.

"Some people keep talking about punitive measures, but we'd like to calmly make a decision following party rules," Koshiishi said during a TV interview after the vote.

Earlier in the day, Noda told a Lower House committee that the tax hike is crucial to cover growing social security costs and avoid a looming fiscal crisis with mounting government debts.

"There comes a time when we have to come to a conclusion no matter how difficult and painful it is. . . . I would like to join hands with everyone to overcome this critical point," he said.

Yukio Hatoyama, a former prime minister and close ally of Ozawa, was one of the members who voted against the tax hike. In the morning, he told Koshiishi he will step down as the party's senior adviser to express his opposition. But he said after the Lower House plenary session he has "no intention" if leaving the DPJ.

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