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Prime Minister Junichiro Koizumi will go all-out in the 150-day Diet session that convened Friday to push his long-cherished, but highly contentious, plan to privatize the nation’s postal services.

Koizumi is expected to face rough going before the government can submit postal privatization bills to the Diet — hopefully by mid-March. His biggest obstacle will be his own Liberal Democratic Party, a majority of whose members oppose his plan.

Koizumi wants to divide Japan Post into four units — postal delivery, postal savings, postal life insurance and post office network management — when the privatization process begins in 2007.

The LDP wants postal delivery and network management under one roof, ostensibly to make them profitable. It also wants all the privatized entities to be required to provide universal service so the nationwide postal network stays intact.

Critics say the party’s proposal will undermine Koizumi’s plan to streamline the postal system, whose 227 trillion yen in postal savings and 120 trillion yen in life insurance assets have been funneled to deficit-ridden government-affiliated corporations through the “zaito” fiscal investment and loan program. The massive public financial system has also been criticized for depriving the private sector of business opportunities.

“If Koizumi makes concessions and comes up with equivocal bills, it would undermine his public support base and weaken his Cabinet,” said author and critic Ushio Shiota, who is well-versed in the postal privatization issue.

“If he tries to have his way and bills become deadlocked, the prime minister may dissolve the House of Representatives (for a snap election) to turn to the public (for judgment on the issue) — a worst-case scenario for LDP members.”

When bills for privatizing the nation’s debt-ridden expressway corporations were submitted to the Diet last year, it was widely viewed that Koizumi met halfway with LDP members who opposed the move.

Although Koizumi had initially pledged to stop wasteful construction of rural expressways, the legislation that was eventually enacted paved the way for the already heavily indebted expressway operators to complete a contentious 9,342 km network by repaying massive debts over 45 years.

Expressway construction is a key component of LDP pork-barrel politics of wooing support from rural votes, just as rural post offices are also vote-generating machines.

The heads of the “tokutei” designated post offices, who also vehemently oppose any privatization, are among the party’s key vote-organizers.

“But this time, Koizumi will get tough, because postal privatization is his long-cherished desire and the top item on his structural reform agenda,” Shiota said.

The LDP caucus in the Upper House may decide the fate of the postal bills because the chamber cannot be dissolved by the prime minister.

They thus can block the passage of privatization bills — even if they clear the Lower House — without being intimidated by any Koizumi threat to call an election, Shiota said.

But former Prime Minister Yasuhiro Nakasone predicts Koizumi will avoid an all-out confrontation with the LDP.

Koizumi is “changing from being an eccentric” who had once vowed, in a bid to woo voters, to neutralize the LDP, Nakasone told a recent lecture meeting at LDP headquarters, adding Koizumi has become more conciliatory toward his fellow party lawmakers.

“(He) is staking his political life on the postal bills, which cannot clear the Diet unless he does his best to work with the party,” Nakasone said. “And he has come to listen to what the party says, knowing his political life is on the line.”

The Democratic Party of Japan, which is supported by postal unionists in election campaigns, has struck a wait-and-see posture.

“Not many people are interested (in postal reform). Besides, since the government and ruling bloc have not come up with a definitive plan, we must be prudent in deciding our position,” DPJ leader Katsuya Okada said in recent lecture.

Okada said his party would instead try to focus on pension reform during the Diet session.

The DPJ has charged that the pension reform laws that cleared the Diet with support from the ruling coalition last year, which called for hikes in premiums and cuts in benefits over the coming years, fail to deal with fundamental problems in the ailing public pension system.

The ruling bloc — the LDP and New Komeito — have meanwhile criticized the DPJ for not honoring an agreement they reached last year to begin consultations between the ruling and opposition camps for an overall review of the social security programs.

Okada argued that the pension issue should first be extensively debated in the Diet before party-to-party discussions take place.

The DPJ wants the separate pension programs covering the self-employed, salaried workers and public servants, to be integrated.

Koizumi and the ruling bloc have not committed to integration, citing the difficulty in assessing the incomes of the self-employed in order to introduce a unified pension system.

Another key issue on the Diet agenda is the ruling bloc’s plan to submit a bill, possibly in May, to set in motion a public referendum to change the Constitution.

Article 96 of the Constitution says that amendments “shall be initiated by the Diet, through a concurring vote of two-thirds or more of all the members of each house, and shall thereupon require the affirmative vote of a majority of all votes cast thereon, at a special referendum or at such election as the Diet shall specify.”

While Okada said the DPJ will come up with a counterproposal to constitutional change, he indicated the party basically supports the idea of getting the process started, saying the Constitution has provisions for a revision and yet there’s no legislation to put the provisions into effect.

Smaller opposition forces — the Japanese Communist Party and Social Democratic Party — oppose any revision.

JCP Chairman Kazuo Shii and SDP leader Mizuho Fukushima said their parties will present a strong case against legislation that would pave the way to revise the war-denouncing Constitution, particularly because both the LDP and DPJ plan to draft their own constitutional amendments later this year.

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