Noda mulling Cabinet reshuffle to end tax hike impasse

Kyodo

Prime Minister Yoshihiko Noda is considering a Cabinet reshuffle in a bid to secure the support of Liberal Democratic Party to pass sales tax legislation in the Diet, political sources said Thursday.

A reshuffle would likely see Defense Minister Naoki Tanaka and transport minister Takeshi Maeda axed, as requested by the opposition camp, after both were censured by the opposition-dominated Upper House last month.

Noda is likely to meet with DPJ Secretary General Azuma Koshiishi as early as Friday to exchange views on possible talks with the LDP and its ally, New Komeito, and on a Cabinet reshuffle, sources said Wednesday.

Noda’s administration is desperate to pass a bill to hike the consumption tax during the current Diet session that runs through June 21, but requires the support of opposition parties for the bill to clear the divided legislature, in which the ruling Democratic Party of Japan lacks a majority in the Upper House.

To that end, the DPJ aims to commence negotiations with the LDP and New Komeito, the two largest opposition groups, hoping to agree a compromise over its highly contentious plan to raise the sales levy to 10 percent by October 2015.

The two parties are likely to agree to the DPJ’s invitation, providing it first meets certain conditions, such as specifying a time frame for voting on the bill, opposition lawmakers said.

The upcoming trilateral talks, which were backed Thursday by a group of key DPJ lawmakers, are intended to promote mutual cooperation that will allow a Lower House vote on the tax hike legislation to take place during its ongoing session.

Speculation is also rife that the LDP, led by tax-hike advocate Sadakazu Tanigaki, may help the ruling party pass the legislation in exchange for negotiating an amicable dissolution of the House of Representatives and calling a general election.

But former DPJ leader Ichiro Ozawa, who is strongly opposed to the tax hike and leads the largest intraparty faction of more than 100 lawmakers, and Koshiishi, his close ally, are against the idea of an early dissolution of the Lower House, fearing the party would get wiped out in any poll in the near future.