Noda officially gives in on tax, welfare reform

Diet session will be extended to provide time for vote on levy hike

by Masami Ito and Natsuko Fukue

Staff Writers

Prime Minister Yoshihiko Noda and Democratic Party of Japan executives officially endorsed changes to the government’s social security and tax reform bills Wednesday, while signalling the Diet session will be extended, possibly to early September.

Noda was forced to postpone a vote on the revised bills in the Lower House beyond Thursday’s scheduled end of the Diet session, given the fierce opposition from DPJ members against the planned consumption tax hike.

The prime minister had been keen on having the contentious tax hike bill approved before Thursday, but with that bill and other key legislation still hanging fire, the DPJ proposed extending the session to Sept. 8 in a meeting with opposition parties, which didn’t give an immediate answer, party sources said.

Chief Cabinet Secretary Osamu Fujimura stressed that Noda’s goal is to get the tax hike bill and related legislation approved by both chambers during the current Diet session.

Last week, the Liberal Democratic Party and New Komeito agreed to the government’s plan to double the 5 percent consumption tax by October 2015. In exchange, the DPJ decided to shelve some of its key pledges, including a plan to provide ¥70,000 in minimum monthly pension benefits and another to eliminate health insurance fees for seniors.

The two main opposition parties have repeatedly stressed that the Lower House vote should be held Thursday, as planned, hinting at the possibility of submitting a no-confidence vote in the Lower House or a censure motion in the Upper House against Noda if he fails to meet the deadline. But the LDP and New Komeito agreed to approve postponing the vote as long as Noda sets a new deadline.

“We aimed to hold the vote tomorrow, but it has become unrealistic. I think the opposition parties understand that we are doing our best and they basically understand that we are not trying to draw out the vote more than necessary,” said DPJ Diet affairs chief Koriki Jojima.

Meanwhile, the DPJ’s internal rift over the tax hike is escalating and about 50 members headed by former party President Ichiro Ozawa are set to vote no if the matter comes to a Diet vote.

With the support from the LDP and New Komeito, the tax hike bill and related legislation would easily clear the Lower House. But if Ozawa can get 54 DPJ dissenters or more, the internal rift could eventually split the ruling party and cause the DPJ-Kokumin Shinto (People’s New Party) coalition to lose a majority in the 480-seat lower chamber.

To avoid such a scenario, DPJ executives held internal meetings Monday and Tuesday to get party members to accept amendments to the bills related to the tax hike.

The meetings only made matters worse.

After the opponents refused to back down Tuesday, DPJ policy chief Seiji Maehara abruptly ended the discussion and unilaterally decided to endorse the revisions.

“There is no fault in the procedure” to approve the amendments, Maehara said after the meeting at DPJ headquarters.

The party leadership’s unyielding position to push the legislation to reform the tax and social security systems infuriated lawmakers who oppose the revisions.

“It’s unthinkable to stop the meeting just because there is an objection. Everybody is angry. I’m going to oppose when we’re going to vote,” said former agriculture minister Masahiko Yamada, a close ally of Ozawa.