DPJ leaders end acrimonious talks on tax hike, will move bill forward

by Masami Ito

Staff Writer

The Democratic Party of Japan endorsed a bill Wednesday to double the consumption tax to 10 percent by October 2015 after forcibly ending discussions dominated by party members critical of the DPJ leadership.

With the DPJ’s stamp of approval, the administration is ready to officially endorse and submit the tax hike bill to the Diet on Friday.

Getting the bill passed is far from certain as the DPJ dissenters are furious that party leaders ended the internal discussions and threaten to vote no on the tax hike in the Diet.

“I think that (the party leadership) tried as much as possible to reflect the opinions raised through the extensive discussions, and I think that the time has come to wrap it up,” Prime Minister Yoshihiko Noda said in the morning.

But Noda’s woes won’t end with the DPJ. Shizuka Kamei, leader of the DPJ’s junior coalition partner, Kokumin Shinto (People’s New Party), is threatening to break the alliance if the Noda administration goes through with its plan and submits the bill.

However, Chief Cabinet Secretary Osamu Fujimura stressed that everything will go as planned.

“There are no changes to the fact that the government will submit the bill by the end of the fiscal year after making some revisions,” Fujimura said. Saturday is the final day of the fiscal year.

To mollify the opponents, including “shadow shogun” Ichiro Ozawa and his followers, DPJ executives repeatedly altered the bill over the course of the discussions that kicked off in mid-March.

On Tuesday evening, DPJ policy chief Seiji Maehara and other top executives proposed scrapping the controversial clause to further raise the consumption tax after the hike to 10 percent.

Maehara also agreed to include a nonbinding clause stipulating that the government would take necessary measures to achieve a nominal economic growth rate of 3 percent and a real growth rate of 2 percent. The numbers, however, are not a prerequisite to implement the tax hike, which is what the opponents demanded and they are far from being satisfied.

“The clause, although it is not a prerequisite, stipulates that the government has the responsibility to aim for that economic growth rate,” Maehara said. “We wanted some sort of (numerical) guarantee that wasn’t a prerequisite so the government would bear responsibility to end deflation.”

The final meeting began at around 8 p.m. Tuesday and lasted six hours. But as Maehara tried to conclude the talks, opponents fought back fiercely, and the meeting ended in chaos as they tried to prevent him from leaving the room.

“I don’t think 100 percent of the people agree on any theme . . . but the bill is important and we need to respect the opinions of the opponents,” Maehara said. “At the same time, we could not hold discussions forever. That is why we made a considerable amount of amendments.”

Maehara also stressed that the procedure to approve the bill was done properly and that DPJ lawmakers are obliged to vote for it in the Diet.

Meanwhile, the dissenters held a news conference after the Tuesday meeting to harshly criticize the DPJ leaders for forcefully ending the talks.

The party leaders were “intent on making sure that the government approves the bill by the end of March, and it is very disappointing that the discussion ended the way they did, without putting all of the opinions together,” said DPJ lawmaker Shozo Azuma, a member of the Ozawa clan.