Thursday, Jan. 5, 2012

By MASAMI ITO

Prime Minister Yoshihiko Noda reiterated his determination Wednesday to raise the consumption tax and said he will officially call on the opposition camp to begin discussions on the contentious issue next week.

In his first news conference of the year, Noda stressed the need for a tax hike to cover snowballing social security expenditures, which in Japan's graying, low-birthrate society are rising by ¥1 trillion every year.

But the opposition camp, led by the Liberal Democratic Party, later in the day rejected Noda's proposal to start talks, demanding instead that he dissolve the Lower House and call a snap election to let the public express its opinion on the issue.

Paying for social security "has been a source of trouble since the Liberal Democratic Party and New Komeito were in power, and we are not in a situation to put it off anymore," Noda said.

"We need to establish a social security system that supports all generations — without it, I think it will be difficult to guarantee a sustainable social security system," he said.

The ruling Democratic Party of Japan approved a draft proposal to raise the consumption tax to 8 percent from the current 5 percent in April 2014, and then to 10 percent in October 2015. The government will officially endorse the draft later this week and is aiming to submit a bill to the Diet before the end of the current fiscal year in March.

But the chances of the tax actually being hiked remain unclear, as the DPJ is deeply split on the issue, which has caused some of its members to defect.

Noda emphasized his determination to raise the tax, despite the stiff resistance from opposition parties, to keep the nation's fiscal crisis from worsening, saying, "I believe the situation will change if my words firmly reach (the opposition), and will never give up on this great cause."

Noda also vowed to pass bills to curb public spending by cutting the salaries of public servants and the number of Diet members, in a bid to persuade the public to accept a greater financial burden. Another priority will be to rectify the imbalance in the value of votes between populated and depopulated constituencies, a situation the Supreme Court termed a "state of unconstitutionality."

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