The secretary general of the Liberal Democratic Party ruled out a possible consumption tax hike Sunday, calling it "politically impossible for the time being."

Speaking on a TV talk show, Taku Yamasaki was apparently referring to comments made earlier by Prime Minister Junichiro Koizumi, who said the consumption tax would be part of reform talks held by the government and the LDP tax panels.

"It's a medium-term issue and is politically impossible for the time being," Yamasaki said.

But Yamasaki said the LDP Tax System Research Commission will consider whether to lower the minimum taxable income in the interest of fiscal reconstruction.

"Reviewing the minimum taxable income will be one of the issues for discussions on how to secure tax revenues and to ensure fairness of tax burdens," Yamasaki said.

On measures to prop up the sagging economy, Yamasaki stressed the need to drastically reform land taxation to boost the liquidity of the real estate market, inheritance and donation taxes.

Noda urges stimulus

The government may find it necessary to compile a supplementary budget for fiscal 2002 some time next fall to prop up the economy, the head of the New Conservative Party, a tripartite coalition member, said Sunday.

"The second supplementary budget for fiscal 2001 will work to a certain extent, but there will be shortfalls," Takeshi Noda told a TV talk show.

"A supplementary budget for fiscal 2002 will certainly be one of the issues" to keep public works and other policy measures moving to stimulate the economy, he said.

Bad loans first: DPJ

The government should first work to clear out the bad loans extended by private banks to major corporate borrowers to ease the crushing burden on smaller firms, Yukio Hatoyama, leader of the Democratic Party of Japan, said Sunday.

"A time lag should be allowed between listed and smaller companies," the leader of the largest opposition party said on a TV talk show, noting that smaller companies are struggling to keep up with the government's policy of accelerating bad-loan disposal.

Critics say banks are targeting smaller firms first, leading them to go bankrupt or scale down operations.

Hatoyama called for a "very large" injection of public funds into banks and urged the government to consider nationalizing the weak ones to prevent a financial crisis.