Concerning the issue of raising consumption tax during the current diet, Prime Minister Yoshihiko Noda wavers between two major options. Despite his widely publicized determination to pass the bill during the current diet, he still does not seem to have decided between his options. First option is to convince Former Leader of the Democratic Party of Japan (DPJ) Ichiro Ozawa to stop opposing the tax increase. The second option is to bring along Liberal Democratic Party (LDP) to support the current bill. Either path is rather thorny.
Many have criticized Prime Minister Noda’s willingness to beg Mr. Ozawa’s support as too desperate and thus unbecoming for prime minister. Still Mr. Noda needs Former Leader’s support since Mr. Ozawa and his faction in the DPJ is a significant voting block. Azuma Koshiishi, the party’s general secretary, is a good friend of Mr. Ozawa and wants to see if any sort of agreement can be achieved.
The reason for Mr. Ozawa’s disagreement is understandable. The DPJ’s 2009 political manifest clearly indicates that the party would not raise consumption tax for four years. Then-Chairman of the Policy Affairs Research Council, Masayuki Naoshima announced that even the debate about the tax increase would have to wait for another election. Mr. Ozawa is just faithful to the party orthodoxy while some such as Mr. Noda, Seiji Maehara, and Yoshito Sengoku have espoused a heterodox view.
If Prime Minister chooses to shake hands with the LDP, he has to make some significant changes in the current bill. During the Special Committee meeting on social security and tax reform on May 23, Toshimitsu Mogi, the Chairman of Policy Research Council of the LDP, asked Prime Minister Noda to consider five major points if he seeks the LDP to join his bill. One of the points requires the DPJ to reconsider the party’s decision to abolish Latter-Stage Elderly Healthcare System started in April 2008. However, on May 31, the DPJ surprisingly composed a bill to abolish Latter-Stage Elderly Healthcare System and asked Japanese government to pass it during this diet.
The LDP’s another demand is to replace Defense Minister Naoki Tanaka and Land, Infrastructure, Transport and Tourism Minister Takeshi Maeda who have recently been censured. Prime Minister Noda has been unwilling to replace his ministers, but if he wants the LDP’s support, he might need to do so.
Along with these demands, the LDP leader Sadakazu Tanigaki told reporters on May 31 that the DPJ needs to revise their political manifest as well as to dissolve the House of Representative in order to have a general election.
Even after swallowing these heavy camels to win the LDP’s support, Mr. Noda still has to face the collapse of his party as well as a national election. The party will break at least in half because Mr. Ozawa will not support Prime Minister’s move. A national election is most likely to destroy the DPJ and perhaps open up an unwelcoming political space for Mr. Toru Hashimoto and his party. The current poll conducted by Kyodo News shows that 56.8% of the people opposes Mr. Noda’s Consumption Tax Bill. Only 41.7% favors it. Another poll conducted by Nikkei and TV Tokyo shows that 53% opposes and only 38% favors. Given this poll, the election will be a very rough one for Mr. Noda and the DPJ.
Mr. Noda does not have too much time left. The current diet closes on June 21. He needs to fly to Mexico on 16th to attend G20 meetings (18-19th). So he envisions to pass the bill by June 15. If he really wants to pass, he has to go closer to LDP’s side. Yoshito Sengoku, for example, voiced on June 1 his willingness to swallow all the requirements proposed by the LDP. Probably, this is the only option if Mr. Noda is serious about passing the bill given the tight schedule ahead. The LDP’s secretary-general Nobuteru Ishihara also voiced his willingness not to demand Prime Minister to dissolve the House of Representative.
Of course, the other option is still barely open. Mr. Noda is schedule to meet once again with Mr. Ozawa on Sunday. This might be the final meeting between the two.
I suppose the decision is in Prime Minister’s hand. If he will determined to break his party in half, betray the party manifest, and go through fierce and difficult election, he should go ahead and do that. Notwithstanding the economic implication of the Tax Increase in recession, the political implication of his decision will be great. Does he have that much determination and courage to stand against all oppositions from his own party and the majority of Japanese people? Can he take responsibility of this type of decision? Is he willing to even terminate his political career if his decision leads to his party’s destruction? It seems to be a very thorny road to tread.