• Kyodo News


Ichiro Ozawa is vowing to raise the share of tax revenues for local governments to close to 50 percent in response to demands by governors, while Prime Minister Naoto Kan has pledged leadership by politicians in moving power out of Tokyo.

The Association of Prefectural Governors disclosed Thursday these and other pledges made by the two Democratic Party of Japan presidential candidates when they answered questions by the association ahead of the DPJ’s election Tuesday.

The central government has been considering increasing local governments’ tax revenue share from 40 percent at present to promote decentralization.

In his answers, Ozawa said the central government should limit subsidies to local governments and boost their tax receipts and taxation power.

The introduction of a local environmental tax as requested by local governments should be considered positively, he said.

Kan said politicians should be the leading players in decentralization because central government bureaucrats would fall short of achieving the goal.

He also said his Cabinet will compile a plan this year to eliminate the central government’s local offices.

On the plan to gradually transform the central government’s conditional subsidies to local governments into unconditional grants, Ozawa offered a vague pledge to give consideration to local needs, including infrastructure development, and fiscal conditions.

Kan said his Cabinet will work out a detailed plan to allow local governments to reflect reforms in their budgets for fiscal 2011.

Both pledged to allow three pending decentralization bills to clear the Diet as early as possible.

Ozawa touted a plan to use all ¥2 trillion in reserve outlays for fiscal 2010 to facilitate housing loans, make schools and hospitals more earthquake safe, and other measures to stimulate regional economies affected by the yen’s appreciation.

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