Prime Minister Yoshihiko Noda on Friday reshuffled his Cabinet. His main aim is to push a hike in the consumption tax and social welfare reform. To show his strong will, he picked Mr. Katsuya Okada as deputy prime minister and minister in charge of tax and social welfare reform.
Mr. Okada is a former DPJ chief and served as DPJ secretary general under the Kan administration. But given his record, it is doubtful that he has the ability to successfully unite the government and the party, and persuade the opposition to accept a tax hike. When he was secretary general, he failed to build a constructive relationship with the opposition, which controls the Upper House, apparently because he did not understand the importance of doing so. Mr. Noda's decision to give Mr. Okada the portfolio could strengthen opposition among some DPJ lawmakers to a tax hike.
Although Mr. Noda is determined to raise the consumption tax, his plan will be a tough sell. One reason is the timing. Raising the consumption tax when the economy is stagnant could negatively impact economic activities and reduce total tax revenues. People will not also accept a tax hike without a reduction in the wasteful use of public money. Mr. Noda says that he will reduce the number of Diet seats, but this is a stunt intended to divert attention from the real issue of breaking up vested interests in the bureaucracy. Mr. Noda's plan to cut proportional representation Diet seats would also likely to lead to a suppression of minority opinions.