Pension reform package enacted after dramatic all-night standoff

by

A set of pension reform bills passed the House of Councilors early Saturday with the support of the ruling coalition, despite last-ditch resistance by opposition parties throughout the night.

Enactment of the bills — one of the biggest items on Prime Minister Junichiro Koizumi’s legislative agenda — came following an unprecedented showdown, with the ruling coalition and the opposition confronting each other over a no-confidence motion against Upper House President Hiroyuki Kurata.

The no-confidence motion was filed early Saturday in a bid to further delay putting the contentious pension bills — aimed at increasing premiums and decreasing benefits over the course of more than a decade — to a vote by a plenary session of the Upper House.

With the motion, the opposition bloc intended to have Kurata replaced by Upper House Vice President Shoji Motooka to prevent the chamber from voting on the pension bills Saturday and to have the bills scrapped.

Before taking their current positions, Kurata was a member of the ruling Liberal Democratic Party and Motooka was from the Democratic Party of Japan, the largest opposition party.

Kurata had to leave the chamber while the no-confidence motion was put to a vote.

As soon as Motooka took the president’s seat just before dawn, he abruptly declared the session adjourned for the day.

However, shortly after Motooka left the floor along with opposition lawmakers, Kurata — in a tight cordon of Diet guards — reached the Upper House floor where ruling coalition lawmakers waited. He took his seat and declared Motooka’s earlier declaration invalid.

“The vice president declared the session adjourned. But that runs counter to Article 82 of the Upper House rules and thus is invalid,” Kurata told the session. “Therefore, we will continue deliberations.”

Article 82 stipulates that the president can declare an adjournment only when deliberations have finished.

The plenary session resumed later in the morning, passing the pension reform bills on the strength of the majority held by the LDP and its coalition partner, New Komeito, after voting down the no-confidence motion against Kurata as well as an opposition-proposed censure motion against Health, Labor and Welfare Minister Chikara Sakaguchi.

Earlier Saturday, the opposition camp presented other no-confidence and censure motions against the chairman of the House Steering Committee as well as six other Cabinet members and two vice welfare ministers who failed in the past to pay into the National Pension Program, but the opposition withdrew those motions later.

While the Japanese Communist Party came out against the bills on the floor, the DPJ and the Social Democratic Party boycotted the plenary session in protest.

SDP and JCP officials said they don’t approve the bills’ passage, while senior DPJ officials expressed their intention to take legal action to nullify Saturday’s voting.

“Even though the vice president declared the plenary adjourned by fair authority, the president who had the no-confidence motion against him reversed the announcement. It’s something that must not happen,” DPJ leader Katsuya Okada told reporters. “(The matter) will be taken to court.”

Akira Imaizumi, chairman of the DPJ Diet Affairs Committee in the Upper House, criticized Kurata for violating Article 85 of the Upper House regulations, which stipulates that no one is allowed to enter into deliberations once a session is declared adjourned by the president.

The ruling coalition blamed the opposition parties and Motooka for attempting to throw the plenary session into confusion. LDP Secretary General Shinzo Abe said, “The DPJ cannot win people’s understanding by resorting to such outdated tactics as the ‘ox walk’ and putting up physical resistance.”

SDP Secretary General Seiji Mataichi said his party will make the pension issue the main campaign issue in next month’s Upper House election, adding that severe judgment must be handed down to the ruling coalition for forcing the bills through the Diet while some 70 percent of respondents in recent opinion polls expressed opposition to the bills.

The pension reform package will see premiums for the corporate employee pension program raised to 18.3 percent by fiscal 2017 from the current 13.58 percent, while those for the basic National Pension Program will be raised to a maximum of 16,900 yen a month from the current 13,300 yen.

While the government has pledged to guarantee that the pension benefit won’t fall below 50 percent of average salaries of workers in a model case, it is feared the benefits will deteriorate further in the future, depending on the progress of the rapidly aging population.

Deliberations on the pension bills have been clouded by revelations that seven Cabinet ministers and a number of Diet members, including some in the opposition camp, had failed to either pay their mandatory pension premiums or join the National Pension Program in the past.

Full reform urged Business leaders called Saturday for drastic reform of the social security system, including the medical and nursing fields, following enactment earlier in the day of a package of pension reform laws.

“The enactment of the legislation marks the first step toward reviewing the overall social security system,” said Hiroshi Okuda, chairman of the Japan Business Federation.

But Okuda expressed concern over the possibility the laws will have a negative effect on households and businesses.

“Impacts on households and companies will be large,” he said in reference to a planned increase in premium payments for corporate employees.

Under the enacted package, the ceiling for premiums in the pension program for corporate employees is to be raised from 13.58 percent of annual income to 18.30 percent in fiscal 2017. Half of the premiums are shouldered by their employers.

“I want to call for drastic reform” toward building a sustainable system, Okuda said.

Kakutaro Kitashiro, chairman of the Japan Association of Corporate Executives, proposed that concerned parties establish dialogue to discuss ways to implement reforms to the social security system.

“I strongly call for swift implementation of measures to reform the social security system with an eye toward achieving unification of pension programs by immediately setting up a forum for discussion and reaching an agreement within about a year,” Kitashiro said.