Half-year on, Hatoyama struggling

Scandal, debt abound; progress on tall-order poll pledges eludes

by and

It’s been six months since Prime Minister Yukio Hatoyama and his Cabinet strutted the red-carpet for an inaugural photo session, staging a perfect Hollywood ending to a summer blockbuster election that knocked the Liberal Democratic Party out of almost 50 years of unbroken rule.

But those who pinned high hopes on the sequel that had Hatoyama’s Democratic Party of Japan following through on its political pledges are quickly being let down, as the DPJ takes baby steps in pursuit of its goals, if that.

In terms of its promises, the ruling bloc has little to show for itself so far.

Cutting the wasteful spending characterized by the previous government’s budget was a top DPJ promise, with the party pledging to generate new fiscal resources of ¥9.1 trillion from the ¥207 trillion in the general and special account budgets of fiscal 2009.

But a key task force under Hatoyama succeeded in trimming just ¥690 billion in “wasteful spending,” while tax revenues in fiscal 2010 are expected to fall to around ¥37 trillion from the initial projection of ¥46 trillion.

Many of the DPJ-led bloc’s election promises now seem unreachable, given the snowballing government deficit and debt. And it is growing increasingly likely one pledge — not to raise the 5 percent consumption tax for four years — may be broken, however unpalatable with voters, to give the government some breathing space, although with an Upper House election looming in July, this levy will undoubtedly stay as is for now.

The DPJ-led government is trying to stick to its pledges, lest it be labeled inconsistent, like its most recent LDP predecessor administrations, including the last one, led by former Prime Minister Taro Aso, whose flip-flopping on key issues invited harsh criticism.

Hatoyama has been trying to solicit public forgiveness, telling reporters adjustments are part of life.

“In a sense, democracy is about swaying,” he said Thursday, explaining the importance of adjusting and adapting.

He has also acknowledged the DPJ may still have an opposition party mind-set, even though it is now in charge.

“I’ve been feeling a strong sense of responsibility,” Hatoyama said of his first half year at the helm. “The weight of responsibility is palpable, much more than I expected.”

Hatoyama’s first months in office received widespread attention, with Cabinet members announcing drastic turnarounds from LDP policies.

A symbolic move was infrastructure minister Seiji Maehara’s announcement that the administration will abide by the DPJ campaign pledge for last summer’s election to end construction of Yamba Dam in Gunma Prefecture.

“(The cancellation) is written in our (campaign) manifesto, so we will terminate the dam project,” Maehara said the day after the Cabinet was sworn in, even though 70 percent of the ¥460 billion project had already being paid.

Boasting the motto to shift spending priorities “from concrete to people,” the 2010 fiscal budget currently undergoing Diet deliberations looks to up welfare spending nearly 10 percent to ¥27.27 trillion, while slashing public works projects by more than 18 percent to ¥5.77 trillion, the lowest level in 32 years.

But while progress has gained praise, the fiscal 2010 budget draft is far from what was originally pitched to voters.

The DPJ initially predicted it could fulfill its pledges without additional expenditure, but trimming wasteful spending did not achieve this.

Hatoyama was forced to backpedal on key promises, including his vow to end a provisional gas tax and to make expressways toll-free.

In media polls, Hatoyama’s approval rate shot up to over 70 percent immediately after he took power — a notable feat considering the DPJ had zero experience in running a government. But the pendulum quickly swung the other way, with his support rate now under 40 percent, and for the first time sliding below his disapproval rate.

“I believe the numbers are reflecting the lack of tangible outcomes following the regime change,” Chief Cabinet Secretary Hirofumi Hirano acknowledged earlier this month while touching on the poll results.

Hidekazu Kawai, a professor emeritus at Gakushuin University, counsels patience, noting the DPJ will need at least a year to make substantial progress after taking over from the LDP and re-creating government systems from scratch.

But while the DPJ may argue it needs time to follow through on its pledges, the political funds scandals embroiling Hatoyama and DPJ Secretary General Ichiro Ozawa are testing the public’s patience, he said.

“That is truly what caused the (popularity) bubble to burst” for the DPJ, Kawai explained, touching on Hatoyama’s unregistered donations from his mother as well as the shady nature of cash paid into Ozawa’s fund management body, some of which went toward a dubious land buy. Aides of both Hotoyama and Ozawa were arrested and indicted for alleged violation of the Political Funds Control Law.

The two scandals caused far more damage to the administration and let voters down, he said.

“That (Ozawa) scandal could shake up things, possibly even force Ozawa to resign,” Kawai said. The scandal — and not the lack of progress in policies — could hurt the DPJ in the July Upper House election and lead to a reorganized ruling bloc, he added.

Jun Saito, an associate professor of political science at Yale University, said the DPJ’s inexperience in creating economic policies was visible during the first half-year. The party must demonstrate a long-term agenda to sell to the public, he warned.

“For the long run, the DPJ needs an economic policy to enhance Japan’s productivity. It should reallocate resources from the LDP’s pork-barrel slush funds to put toward education, research and development and economic infrastructure,” Saito said.

Another key DPJ goal yet to show significant progress is lessening the involvement of bureaucrats in policymaking.

Hatoyama acted quickly to cancel a weekly meeting between administrative vice ministers that channeled Cabinet decisions and policymaking, while also calling off routine news conferences by top bureaucrats to lay bare that government-appointees were in charge.

But the administration’s installation of Jiro Saito, a former vice finance minister, to the Japan Post Holdings presidency raised eyebrows for running counter to the pledge to weaken the bureaucrats.

“The DPJ came out bureaucrat-bashing, but has so far remained unable to figure out how to make use of the bureaucrats,” Gakushuin University’s Kawai said. It could take more time for the administration to truly establish effective control over them, he added.

Diplomatic challenges also loom for the DPJ.

While claiming ties with Washington are the cornerstone of diplomacy, the relocation of U.S. Marine Corps Air Station Futenma remains a thorny, open question.

Hatoyama hopes to covey the government’s plan by the end of May, but a pragmatic resolution that satisfies both Okinawa and the United States seems a long shot.

“The new administration has been doing well with China and South Korea, and given that the Japanese economy is more dependent upon these two economies, the DPJ has been doing reasonably well,” Yale University’s Saito said. But he warned Futenma will remain a Tokyo-Washington snag as long as the issue remains unresolved.

As its public support dwindles, some DPJ ranks are voicing concern over the July election, which could determine the fate of the Hatoyama Cabinet.

Yale’s Saito said if the DPJ fails to secure a comfortable majority in the poll, it may opt to sever its coalition ties with the Social Democratic Party and take on New Komeito in order to gain more policy flexibility, as the latter lacks a salient foreign policy preference.

“Forming a coalition with Your Party is also a possibility,” Saito said, predicting a regime change if the DPJ doesn’t get down to business quickly.

Six-month progress report on coalition poll wish list

Six-month progress report on coalition poll wish list

Tuition-free high schools

The Diet is making progress to pass a bill in time for the April start of the school year, but debate over including pro-Pyongyang schools is clouding the process.

Monthly child allowances

After debate on whether to provide allowances to high-income families, the government is preparing to distribute by the April start of the fiscal year half of the ¥26,000 monthly payment to parents for any child up to and including junior high schoolers. He has also said he would not oppose extending the same payments to children in institutions.

Drastic cuts in wasteful budgetary spending

The DPJ pledged in its election campaign last summer to eliminate “wasteful spending” and generate new fiscal resources of ¥9.1 trillion from the ¥207 trillion in the fiscal 2009 general and special account budgets.

But a key task force under Prime Minister Yukio Hatoyama succeeded in trimming a mere ¥690 billion from the general account, while the 2010 budget hit a record high of ¥92.3 trillion and the government is facing a greater fiscal crisis.

Introduction of toll-free expressways

The government will test the impact of toll-free expressways at selected locations beginning in June. But the chance of nationwide implementation is unclear and critics say making all turnpikes free would run counter to efforts to achieve emissions-reductions goals. Railroads and ferry companies also oppose toll-free turnpikes, as they face revenue shortfalls.

Lessening the administration’s dependency on bureaucrats

Visible changes include terminating news conferences by bureaucrats as well as axing weekly meetings between administrative vice ministers. But Hatoyama’s new national strategic office, created to manage cross-ministerial issues and government policies, still has not established its identity. The DPJ’s appointment of a veteran former bureaucrat to lead Japan Post received criticism.

Measures to combat climate change and creating new industries

Although Hatoyama announced a 25 percent carbon dioxide emission reduction from 1990 levels by 2020 that eclipses previous proposals by LDP administrations, specific measures to realize the goal are unclear.

Pension system overhaul

A proposal to create a passbook system intended to record pension payments is still in the making.

The government began discussions earlier this month on a planned public pension system involving a minimum-guaranteed benefit program.