Ibuki tells LDP to draft tax hike scenarios

New finance minister wants to know how and when to do it before election campaign gets under way

by Shinichi Terada

Finance Minister Bunmei Ibuki said Saturday the ruling Liberal Democratic Party needs to propose a scenario on how and when to ask for a tax hike before it starts campaigning for the next general election.

The election must be held by September 2009.

Although Ibuki carefully avoided making a direct reference to a consumption tax hike, his remarks apparently mean the party is likely to map out a schedule and determine an amount for the hike before the election.

“We need to show a scenario and time frame on the burden we are asking of taxpayers to implement various policies for local governments and small and midsize companies,” Ibuki said at a news conference. “That will be the issue of the election.”

Since the opposition Democratic Party of Japan has claimed it will not seek a consumption tax hike, Ibuki said he will question the party on how it will come up with additional financial resources to cover ballooning social security costs.

“If the government decides a further burden is necessary from the public, it will be a great amount of money,” said Ibuki, a former Finance Ministry bureaucrat. “It will eventually be decided whether (the hike) will be in the form of income tax or consumption tax.”

Prime Minister Yasuo Fukuda said in June a consumption tax hike will be considered over the next two to three years.

Kaoru Yosano, economic and fiscal policy minister, also said at a separate press conference Saturday that resources to cover rising social welfare costs will be the key issue for tax reform discussions.

Yosano, who has led tax reform discussions within the LDP, is known as an advocate of consumption tax hikes.

Although the government will stick to its fiscal 2006 plan to curb increases in public pension, health care and other social security-related costs by ¥220 billion each year, the budget for next fiscal year will still rise by ¥650 billion from this year’s.

Meanwhile, trade minister Toshihiro Nikai said the government should draft a supplementary budget or use reserves to stimulate the weakening economy.

“I understand that fiscal reform is extremely important but we cannot manage politics with only that in mind,” Nikai said.

Yasuoka raps plan

Kyodo News

Newly appointed Justice Minister Okiharu Yasuoka indicated Saturday that he was opposed to the idea of offering criminals life imprisonment without parole.

“Japan is a shame-sensitive society, and the majority of people support the idea of dying gracefully to pay for a crime,” he told a news conference after the reshuffled Cabinet’s first meeting the same day. The punishment being proposed “is cruel, and does not fit with Japanese culture.”

The idea has been proposed by a group of bipartisan lawmakers who are opposed to capital punishment. The group plans to submit a bill promoting it to the extraordinary Diet session.

Yasuoka’s predecessor, Kunio Hatoyama, was also cautious about the proposal.

Hayashi plugs refueling mission

Hayashi divided

Kyodo News

New Defense Minister Yoshimasa Hayashi appears supportive of Self-Defense Force activities abroad but negative about missions involving ground troops, according to comments the new minister made on a television program Saturday.

Appearing on a Yomiuri Telecasting Corp. program, Hayashi sounded like he would support a bill to extend the temporary law that authorizes the Maritime Self-Defense Force’s participation in the multinational refueling mission in the Indian Ocean. The mission supports U.S.-led antiterrorism operations in and around Afghanistan.

“We will explain to the people why we need to do this and thoroughly prepare” to win their support, Hayashi said.

But Hayashi did not clarify whether the ruling camp should hold a second vote in the House of Representatives, the powerful Lower House, to extend the refueling mission, as it did to enact the current refueling law in January.

As for aiding Afghanistan, Hayashi took a negative stance on sending the Self-Defense Forces there to help rebuild the war-torn country.

In the Indian Ocean, an MSDF supply ship and a destroyer are refueling foreign naval vessels participating in U.S.-led efforts to interdict ships allegedly linked to terrorism in and around Afghanistan.