DPJ platform sidesteps financing question

'Ear-pleasing dole' smacks of tax hikes

by Daisuke Yamamoto

Kyodo News

The Democratic Party of Japan’s policy platform, which pledges large spending projects and an end to expressway tolls, has raised questions about exactly how such projects would be financed.

The proposed establishment of a politician-led governing structure and measures aimed at boosting the role of the prime minister’s office in policymaking are also sparking concern over whether politicians would really be able to overcome the expected resistance from bureaucrats.

“It appears the pace of doling out has picked up,” said Tomoaki Iwai, a political science professor at Nihon University. “The key to this issue is finding proper sources of financing.”

The DPJ platform promises a monthly allowance of ¥26,000 for each child of junior high school age or younger, raising the amount from its previous proposal of ¥16,000.

DPJ President Yukio Hatoyama has said a DPJ-led government would first scrap wasteful projects as much as possible before considering other avenues for financing.

“I’m convinced that we would be able to secure about ¥9 trillion for financing sources by implementing only the projects required,” Hatoyama said Monday in announcing the campaign platform.

Sensing a chance to strike back at its popular rival, the embattled Liberal Democratic Party criticized the opposition for failing to address the financing problem and for engaging in vote-buying.

“It remains quite unclear how to finance (these measures),” Prime Minister Taro Aso said Monday, adding that what he described as the “ear-pleasing dole” would be extremely dangerous.

The DPJ’s other policy initiatives that would entail large public spending include income support for households involved in agriculture and fisheries, the abolition of tuition fees for public high school students as well as the scrapping of expressway tolls.

Experts say all the measures cannot be implemented without resorting to an option that would turn off many voters — hiking the 5 percent consumption tax.

The DPJ has pledged not to raise the tax for at least four years.

“The DPJ has said it will finance (its promises) by tapping into hidden government funds and doing away with wasteful government projects as well as effectively raising the income tax,” said Masaaki Suzuki, a senior economist for Mizuho Research Institute. “But a consumption tax hike is the only way to finance projects that would cost trillions of yen.”

Suzuki said the DPJ’s platform would effectively raise the income tax for salaried workers, in part because it would abolish deductions for spouses and dependents.

The DPJ, he said, should instead aim at getting wealthy elderly people to pay more taxes as a matter of achieving a proper distribution of wealth.

The platform promises to build a government led by politicians, in part by appointing more than 100 Diet members to posts in ministries and agencies.

Given the long-standing criticism that bureaucrats wield too much power over policymaking, experts speak highly of the proposal but question whether it can really be implemented due to the sheer number of lawmakers required.

Bureaucrats are also likely to resist such moves, experts say.

The platform also calls for establishing a national strategy council under the prime minister, where bureaucrats and private-sector experts would work together to set basic policies on the budget and diplomacy.

“They may succeed in creating something close to the concept, but it will likely end up being a medium-term project,” Nihon University’s Iwai said, in part because a lot of legislative work would be required.

Iwai said it would be difficult to overcome the vested interests in ministries and agencies, but politicians must begin working on it at some point.

“If politicians are resolved to take the lead in politics, it is important for cross-party discussion (on the issue) on the premise that the two largest parties would be taking power in turn,” he said.