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Thursday, July 12, 2012


With record of flips, the risk of a flop

Staff writers

The launch of Ichiro Ozawa's new party Wednesday adds another chapter of inconsistency on taxes and nuclear power by the former leader of the Democratic Party of Japan.

News photo
Ichiro Ozawa

While the new party bills itself as a force against tax hikes and nuclear power, Ozawa has a history of flip-flopping on tax issues. At times he has been a vocal advocate of raising the consumption tax, only to reverse his stance when facing an election.

His focus now appears to be on the next Lower House election, because most of his followers in the new party are rookie lawmakers who don't have strong campaign machines and face a real risk of losing their seats.

Ozawa's recent move to go against the DPJ-backed sales tax hike "is completely the opposite from what he used to say," Liberal Democratic Party policy chief Toshimitsu Motegi said last week.

Motegi pointed out that Ozawa, when he was DPJ chief in 2007, reached out to the LDP and "proposed that we join hands to pursue a consumption tax hike" while the DPJ would form a grand coalition with the LDP-led government headed by Prime Minister Yasuo Fukuda.

Ex-Prime Minister Yoshiro Mori, an LDP executive who served as a middleman between Ozawa and Fukuda, has also said Ozawa proposed that the DPJ and LDP come together in a grand coalition to raise the sales tax and reform the social security system.

Ozawa "used to say there will be no progress in Japanese politics" if major parties keep avoiding raising the unpopular tax, Mori said during a TV news interview in 2010.

The flip-flops on the consumption tax are nothing new. When he published "Nihon Kaizo Keikaku" ("Blueprint for a New Japan") in 1993, Ozawa argued the tax should be raised from the 3 percent it was at the time to 10 percent while slashing both income and residence taxes.

Ozawa was also pulling the strings when Prime Minister Morihiro Hosokawa in 1994 proposed a hike that would have technically raised the consumption tax to 7 percent to cover welfare costs. The plan never materialized due to strong resistance from both ruling and opposition parties.

"Japan's finances and economy are heading downhill, and we must be aware that tax revenues will drop accordingly," Ozawa said in explaining the need for a tax hike in his book "Kataru" ("Speaking Out") published in 1996.

"Something must be done before it is too late," he said, adding it is "Japan's tragedy" that politicians only promote policies that appeal to the voters.

But during election campaigns, Ozawa has sought to lull voters by promising not to raise the tax.

In 1996 as head of the New Frontier Party, he promised voters he would try to block the planned rise of the consumption tax to 5 percent.

The party promised to maintain the rate at 3 percent while slashing other taxes by as much as ¥18 trillion.

Most recently, Ozawa was a key executive when the DPJ pledged during the 2009 Lower House poll campaign not to raise the tax.

While not being known for commenting on nuclear policy, Ozawa in his 1996 book said it is "self-centered" to oppose nuclear power generation.

"Not much can be done if the public seeks to enjoy peace and prosperity and their freedom" while refusing to pay the cost, he said. Now his new party is singing a different tune.

And yet Ozawa has been consistent on one way: He adopts whatever policy slogans that are likely to appeal to voters at a given time.

Speculation is growing that Prime Minister Yoshihiko Noda could dissolve the Lower House for a snap election as early as autumn, and Ozawa's new party may shrink if its founding members with weak voter support fail to hold onto their Diet seats.

Among the 49 lawmakers who joined the party, 33 are first-term Diet members with little name recognition, and 24 of them got their seats by riding the DPJ's landslide in the 2009 Lower House election.

Only four, including Ozawa, have been in the Diet more than 10 years, a far cry from the days when Ozawa could bring along influential politicians such as former Finance Minister Hirohisa Fujii and reconstruction minister Tatsuo Hirano when he formed new parties in the past. (Wednesday's is his fourth.)

In a Kyodo News survey last month, 79 percent of the respondents said they do not expect much from Ozawa's new party.

The weakest link will be the 12 Lower House members who were elected through the DPJ's strength in the proportional representation segment of the 2009 campaign.

Proportional representation seats are given to parties based on their share of the votes. Candidates elected through this system usually don't have a strong election machine and their success depends on how popular their party happens to be when an election rolls around.

Ozawa's followers will also lose the backing of the Japanese Trade Union Confederation (Rengo), the DPJ's biggest support group.

"We have to compete in a tough election alongside the DPJ, Rengo President Nobuaki Koga said last week, indicating the umbrella group of unions will continue to support the ruling party. "It's regrettable (Ozawa) split the party," Koga said.

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The Japan Times

Article 2 of 16 in National news

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