Keidanren Chairman Hiromasa Yonekura on Friday called on the government to urgently compile and implement wide-ranging social security and tax system reforms, including doubling the consumption tax to 10 percent.
After meeting with Finance Minister Jun Azumi earlier in the day, Yonekura told reporters a program of extensive and deep reforms is “urgently needed.”
“It would become a serious problem if the government fails to address the nation’s deteriorating public finances” before long-term interest rates for government debt start to climb, he said, referring to the possibility of Japan experiencing a eurozone-style sovereign debt crisis.
“I hope opposition parties will proactively join preliminary talks (on reforms)” with the ruling Democratic Party of Japan, Yonekura said. The opposition camp is refusing to negotiate with the ruling coalition before the government submits the relevant bills to the Diet.
During his meeting with Yonekura, Azumi sought support from business leaders over the government’s planned reforms, which would include raising the sales tax to secure additional funds to cover swelling welfare costs.
The government wants to raise the tax from 5 percent to 8 percent in April 2014, and then to 10 percent in October 2015.