Reversing its earlier stance, the Democratic Party of Japan, the largest opposition force, said Friday it will oppose the planned sales tax hike to 10 percent from 8 percent next October.
DPJ Secretary-General Yukio Edano said at a press conference that Prime Minister Shinzo Abe had failed to observe any of the three key prerequisites of an earlier multiparty agreement to push for raising the unpopular tax.
In 2012, the Liberal Democratic Party, DPJ and Komeito agreed to raise the consumption tax from 5 percent to 8 percent in 2014 and to 10 percent in 2015. According to the agreement, all of the additional revenue was to be used only to cover rapidly growing social security costs — the first of the prerequisites.
But Abe used the money for other purposes, Edano claimed.
Abe has also not tried to cut the number of Diet seats to reduce administrative costs before asking taxpayers to contribute more in accordance with the second prerequisite, Edano said.
In addition, Abe’s mishandling of economic policies have pushed up prices and hurt the standard of living for many people, Edano said.
Under the third prerequisite, a tax hike should have been suspended to avert a negative economic impact, according to Edano.
The DPJ thus concluded it can no longer support the three-party agreement to raise the consumption tax, he said.
The DPJ’s decision is seen as a pre-emptive election tactic, as speculation swirls that Abe is likely to dissolve the Lower House next week by pledging to delay the planned sales tax hike by 1½ years.
Asked how long the DPJ would prefer to postpone the tax hike, Edano said the party will not set any particular period because its members believe Abe will not try to implement any of the three prerequisites while he is in power.