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Everyone knows it’s coming, but nobody talks about it in public.

So when health minister Chikara Sakaguchi dared to bring up the politically taboo subject during Wednesday’s Diet session, lawmakers gasped.

Sakaguchi’s suggestion? Increase the consumption tax to cover snowballing costs in the public pension system.

“I think there’s no other choice but a tax increase,” Sakaguchi said during a televised session of the House of Representatives Budget Committee.

In a bid to shore up financing for and rebuild public trust in the state-run pension system, the government has already pledged to increase its funding burden in fiscal 2004 from the current one-third to half of the system’s costs.

The planned hike will cost the government 2.7 trillion yen just to start with but is expected to grow as postwar baby boomers born in the late 1940s begin reaching retirement age.

Almost all experts and lawmakers agree there is no other way to cover the huge approaching increase in pension payments than to hike the unpopular consumption tax. But the government has so far closed its eyes on the matter.

Later in the session, Finance Minister Sadakazu Tanigaki quickly disavowed Sakaguchi’s idea. Opposition lawmakers then railed against him.

“We haven’t reached any conclusion like that yet,” said Tanigaki, insisting a tax hike is only Sakaguchi’s personal idea and that he would “squarely discuss the matter” with him later.

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