Prime Minister Yukio Hatoyama decided Dec. 21 to stick with one of his key policy pledges but to abandon another, saying the government will not set an income cap on the child-care allowance but will maintain the current gasoline tax rate.

Prime Minister Yukio Hatoyama answers questions from reporters Dec. 21 about the child-care allowance and gas allowance tax rate. KYODO PHOTO

Both were key elements in the Democratic Party of Japan's policy pledges in the election last summer that the DPJ won in a landslide.

"I came to the viewpoint that society as a whole should bring up children," Hatoyama said. "Therefore, I have decided not to set an income limit."

Hatoyama added that a new donation scheme will be set up at local governments to give affluent families the opportunity to return the allowance.

He decided to effectively maintain the gasoline tax at its current rate, even though the provisional surcharge will disappear. A new tax will be created to replace the provisional tax, he said.

Hatoyama said the government will study the feasibility of introducing an environment tax over the next year.

The gasoline tax and child-care allowance were the two major roadblocks in the way of completing by the end of the year, as scheduled, a draft of next year's budget.

During the campaign last summer, the DPJ called for introducing a universal child allowance of ¥26,000 a month per child regardless of a family's income, based on the notion that society as a whole should support child-rearing.

The DPJ also promised to abolish surcharges on road-related taxes, which amount to about ¥2.5 trillion in revenue a year, to reduce the burden on motorists.