The tax and social security reform outline adopted by the Cabinet on Friday indicate the government has run out of options and must finally address welfare costs and public finances that have been spiralling out of control for years.
Many members of the ruling Democratic Party of Japan continue to demand that further budget-cutting efforts be made before the consumption tax is raised.
The party's lawmakers fear the proposed hike is so unpopular among the public it could potentially result in the DPJ being booted out of power at the next general election.