Noda to reshuffle Cabinet in bid to start sales tax talks

Kyodo

Prime Minister Yoshihiko Noda has confirmed that he will reshuffle his Cabinet on Friday, in a move seen as a concession to opposition parties to get them to enter into talks on raising the consumption tax.

During a meeting Thursday of key members of the government and the ruling Democratic Party of Japan at the prime minister’s office, Noda was quoted by a senior DPJ lawmaker as saying he would start collecting “resignations from Cabinet members” in preparation for the reshuffle.

While wholesale changes are considered unlikely and most will be technically retained, the reshuffle is seen as crucial to Noda’s efforts to get the opposition camp to begin discussions on the sales tax hike.

Noda is expected to replace Defense Minister Yasuo Ichikawa and consumer affairs minister Kenji Yamaoka, both of whom were censured in the opposition-controlled Upper House last month.

Opposition parties have refused to start discussions on the sales tax, even though some elements are OK with an increase, unless Noda first removes the two censured ministers from his Cabinet.

The prime minister wants to raise the 5 percent consumption tax to 8 percent in April 2014 and then to 10 percent in October 2015. Noda argues that additional funds must be raised to cover soaring social security costs and restore Japan’s fiscal health.

He has pledged to submit a bill to increase the consumption tax to the Diet by the end of March, but the legislation has no chance of clearing the divided Diet without the support of the major opposition parties.

“I believe that Prime Minister Noda is trying to put the government in a stronger position” to increase the sales tax and reform the social security system, Chief Cabinet Secretary Osamu Fujimura said later in the day.

As well as the Cabinet reshuffle, Noda is expected to rejigger the party’s executives, possibly by replacing Hirofumi Hirano as DPJ Diet affairs chief and appointing him as consumer affairs minister, they said.

DPJ Deputy Secretary General Koriki Jojima is considered a possible successor for Hirano, they added.

Nevertheless, it remains highly uncertain whether the Cabinet reshuffle will pave the way for a sales tax hike, as even some lawmakers in the ruling party are opposed to Noda’s plan.

At the end of last year, nine DPJ lawmakers left the party in protest over Noda’s push to raise the tax.

The 150-day ordinary Diet session runs from Jan. 24 to June 21.