Ruling bloc pulls stopgap tax bill

Deal with opposition to 'reach conclusion' on 2008 budget averts Diet clash for now

by and

The ruling bloc withdrew its contentious stopgap bill to briefly extend the extra rates on gasoline and other auto-related taxes after agreeing Wednesday with the opposition to “reach a conclusion” on the fiscal 2008 budget and related bills by the end of March.

Lower House Speaker Yohei Kono, who mediated the agreement, and Upper House President Satsuki Eda said they understand the accord means that the opposition-controlled Upper House will vote on the budget and related bills by March 31. This interpretation means the Liberal Democratic Party-New Komeito alliance can make sure all of the bills clear the Diet before the new fiscal year begins April 1.

But Yukio Hatoyama, secretary general of the Democratic Party of Japan, left it vague whether the largest opposition party agreed to hold an Upper House vote on the bills by the end of March, saying the phrase “reach a conclusion” “has various meanings.”

A senior ruling coalition official also admitted some confusion may emerge at the end of March because the deal leaves room for the opposition camp to differ in its interpretation of the accord.

The stopgap legislation, submitted to the Diet on Tuesday and clearing Lower House committees Wednesday before it was pulled later in the day, was to extend the extra tax rates for two months beyond their scheduled March 31 expiration. It was meant as a stopgap measure until the coalition’s bill to extend the extra rates for another 10 years — which is part of the budget-related package — gets Diet approval. The opposition camp has called for abolition of the extra tax rates.

The accord was reached after fierce opposition protests over the stopgap bill in the morning that threatened to disrupt all Diet proceedings.

Based on Kono’s mediation proposal, six political parties from both the ruling and opposition camps agreed to “come to a certain conclusion by the end of the fiscal year, after holding thorough deliberation, over the budget and (related) revenue bills by holding public hearings and summoning witnesses.”

“I hope the deliberations (in both the lower and upper chambers) will return to normal and be fruitful,” Kono told reporters. “We must continue producing agreements (between the ruling and opposition parties) in the unfamiliar territory of a divided Diet to ensure that decisions get made.”

Hatoyama said the DPJ will not change its position that the extra tax rates should be abolished, but added there is room for compromise.

“This is not the end of everything,” Hatoyama said. “(The DPJ) is about to begin the battle (in the Diet) for the people and we would like to hold discussions that will be understood (by the public).”

Earlier in the day, the ruling bloc rammed the stopgap bill through the Lower House financial and internal affairs committees, while DPJ lawmakers did everything in their power to block the committees’ proceedings as they shouted their protests.

The ruling bloc was preparing to ram the bill through the Lower House by holding a plenary session vote in the afternoon but canceled the move at the last minute after the six parties came to an agreement.

The opposition parties were so fiercely against the stopgap bill because it was submitted on the assumption that the ruling bloc would override its anticipated rejection by the Upper House, making sure the extra rates would continue without interruption.

“This is the Diet. We should come to a conclusion after thorough deliberations,” Eda said. “The (stopgap) bill is a way of saying the Upper House can just lie idle for 60 days.”

The Lower House can hold a second vote on a bill once the Upper House has sat on it for 60 days after clearing the lower chamber.

Last week, the government submitted a tax reform bill for fiscal 2008, including a provision to extend the extra rates for gasoline and other auto-related taxes for another 10 years. The additional rates were introduced in the 1970s as a provisional measure to finance road construction and maintenance but have been in place ever since.

In a divided Diet in which the DPJ-led opposition controls the Upper House, however, the government and ruling bloc had been unsure of its passage before the provisional rates expire March 31.