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Prime Minister Naoto Kan should accomplish administrative reform before pressing for changes in the tax system, Your Party chief Yoshimi Watanabe said Wednesday.

Kan has proposed cross-party debate on tax reform, including raising the 5 percent consumption levy.

Watanabe, whose small opposition party did well in Sunday’s Upper House election, criticized the proposal, saying in an interview that his party cannot accept any “discussions on raising taxes.” He urged the government to first cut wasteful spending through measures such as reducing the numbers of lawmakers and bureaucrats.

Your Party gained 10 seats in the House of Councilors vote and is now widely seen as a potential new partner for the Democratic Party of Japan-led ruling coalition, which lost its majority in the chamber.

“Cooperation would be possible in fields in which we have common agendas,” Watanabe said. But he added collaboration between the two parties would be “partial” and depend on individual issues and policies, denying his party would immediately join the coalition.

Now that the opposition camp has the most seats in the Upper House, the chamber’s president should be chosen from the Liberal Democratic Party, said Watanabe, who served as financial services minister in an LDP-led government. “The way the DPJ managed Diet affairs was really high-handed,” he said.

The DPJ, however, remains the largest party in the Upper House and according to tradition, the party retains the right to choose the chamber’s president. Watanabe also said his party will submit a bill to curb deflation in an extraordinary Diet session due this fall.

Referring to the party’s gains in the election, Watanabe said, “We aim to establish our position (as a party) holding a decisive vote.”

Put on slow-track

Prime Minister Naoto Kan indicated Wednesday he won’t try to compile a tax reform plan by the March 31 end of fiscal 2010 because the Democratic Party of Japan’s policy chief doubted the deadline could be met.

“I will have the (DPJ’s) Policy Research Committee examine how to push ahead with tax reform, including (the timing),” he said.

Kan made the comments after Koichiro Gemba, chairman of the committee, said Tuesday he believes compiling the tax plan by March would be “quite hard” and the DPJ should pursue a consensus with other parties.

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