The government is ready to increase taxes to reduce the massive public debt, Finance Minister Naoto Kan indicated Monday, saying the only catch is to present it in a way that will convince voters.
“It is not just a case of Japan. But politicians, whether they are in the ruling or opposition camps, (face the) trauma (of losing) an election if they speak about a tax hike,” Kan said at the Foreign Correspondents’ Club of Japan.
Even Junichiro Koizumi, one of the most popular prime ministers ever, avoided coming to grips with a tax hike, Kan said.
If the government spends the money wisely, there should be ways in which a tax hike will not interrupt economic growth, he said.
If a way is found, politicians need to thoroughly explain this to voters, and if they can obtain their support, “politicians will be relieved from the trauma,” he said.
Kan also mentioned that the government is preparing a fiscal reconstruction bill that would make the government legally obliged to reconstruct the nation’s fiscal health.
Kan said he wants to use the bill as a catalyst to energize debate among Diet members on how the debt can be reduced without halting economic growth.