Winning the public’s support to hike the consumption tax is the government’s priority as their backing would force opposition parties to drop their stance against tax reforms, new Deputy Prime Minister Katsuya Okada said.
The ruling Democratic Party of Japan is aiming to double the sales tax to 10 percent by October 2015 to help pay for swelling social security costs, a contentious and unpopular proposal.
“The most important thing is whether or not we will be able to explain (the reasons) to the public and persuade them that a consumption tax hike is inevitable,” Okada said during a recent interview with media outlets.
“The opposition parties are being obstinate at present, but I think it will become difficult for them to maintain their stance if public opinion changes (and starts to support reforms),” he said.
The Liberal Democratic Party has mounted an all-out offensive on Prime Minister Yoshihiko Noda, urging him to dissolve the Lower House and call a snap election so the public can vote on the DPJ’s reform proposals before the sales tax is increased.
The findings of a recent Mainichi Shimbun survey on the issue were deeply contradictory. The poll showed that 60 percent of respondents opposed raising the consumption tax, but 68 percent also thought that the current social security system will become unsustainable without a tax hike.
In reference to this contradiction, Okada said he believes voters are sending the government a message, demanding that Noda’s administration first intensify its efforts to drastically streamline the national budget before raising the sales tax.
“I think the public understands that there is going to be a tax hike (eventually),” he said.
“But I don’t think the details of the government’s social security and tax reforms, including how we are going to double the sales tax, have been properly conveyed” to the public yet, he added.
Earlier this month, Noda reshuffled his Cabinet and appointed Okada, a veteran lawmaker and known proponent of reforms, as his right-hand man on the DPJ’s reform proposals.
The reforms are Noda’s signature policy and priority in the ordinary Diet session that kicked off Tuesday, and Okada, who will help draft a reform package and attempt to sell it to the public, will be a huge and influential player.
The deputy prime minister hit the ground running, and has already started pushing for salaries of government workers to be cut 7.8 percent and for the number of Diet members to be slashed. The moves are widely seen as a bid to mollify the public and weaken resistance to a tax hike.
Okada also argued that lawmakers’ salaries should be cut by more than 7.8 percent, but his proposal has drawn stinging criticism from the Lower House Steering Committee — including DPJ members sitting on it.
The committee issued a statement slamming Okada for “exceeding his authority” and its chair slapped him with a warning Monday, arguing that the Diet is independent of the government and that a Cabinet member does not have the power to intervene over lawmakers’ salaries.
During the interview, Okada expressed his frustration at not being able to freely comment on the issue.
“I am restraining myself but it can’t be helped . . . I don’t think it’s right that someone in the government can’t say anything about the legislative body, but I am the deputy prime minister and it may be better not to interfere too much,” Okada said. “So I am restraining myself.”
On energy policy, Okada said he agrees with Noda that a balance must be struck between ensuring the safety of nuclear plants and providing a sufficient supply of electricity so the economy and people’s lives are not affected.
Despite the Fukushima nuclear crisis, the Diet recently approved the government’s plan to resume exports of nuclear technology, sparking criticism from both the opposition camp and even some DPJ lawmakers.
Okada stressed, however, that the decision to import nuclear technology is ultimately made by other countries, and Japan should continue supplying them.
“If a country wants to set up nuclear power plants and asks Japan to export technology and components, I don’t think there is any need to refuse,” Okada said.
“If Japan doesn’t export its nuclear technology, another nation will. The decision is up to each country, and I don’t think the DPJ-led government has any ground to say that resuming nuclear exports is outrageous.”