Prime Minister Yoshihiko Noda may meet Tuesday with arch-rival Ichiro Ozawa in a bid to persuade the former Democratic Party of Japan leader to drop his opposition to the bill to double the 5 percent consumption tax, DPJ sources said.
One of the sources said DPJ Secretary General Azuma Koshiishi is working to arrange a meeting between the two “next Tuesday or Wednesday,” and would serve as mediator for any rendezvous.
But Ozawa, who wields considerable clout as head of the DPJ’s largest faction, is highly unlikely to ease his staunch opposition to hiking the levy, according to the sources.
On Tuesday, he reiterated his stance against raising the sales tax, warning fellow lawmakers in the Diet that his proposed one-one-one meeting with Noda may see no progress.
In the likely event that Ozawa refuses to budge, Noda could be forced to seek further meetings with his bitter rival to prevent an internecine civil war or mass defections from members opposed to his contentious tax plan, according to the sources.
Koshiishi would likely continue to act as the intermediary in getting Noda and Ozawa to reach middle ground, they added.
Ozawa, who is credited with helping the DPJ win power in the 2009 general election, opposes the envisioned tax increase on the grounds that it reneges on the party’s no-tax-hike campaign pledge for that poll.
Noda has repeatedly vowed to stake his political career on passing bills to raise the sales levy as part of comprehensive social security and tax reforms during the current Diet session, but a Lower House vote on the legislation is not expected before June.
As the session ends in June, Noda may have to review the entire schedule for raising the tax, for example by extending the session beyond its June 21 end date, unless Ozawa softens his stance, analysts said. Earlier reports said one option was to drag out the session till year’s end.
If the two fail to compromise, Noda is expected to call for support from the main opposition group, the Liberal Democratic Party, to clear the bill through the divided Diet.
Noda’s Cabinet approved reform legislation in late March that calls for increasing the sales levy to 8 percent in April 2014 and to 10 percent in October 2015.