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Japan's opposition parties struggle to stay on message over consumption tax

JIJI

Opposition parties are struggling to remain in step over the consumption tax after the government raised the rate from 8 percent to 10 percent on Tuesday.

Major parties in opposition are wary of smaller peers’ calls for the rate to be lowered back to 5 percent, although they are largely unified in opposition to the rate of 10 percent.

The consumption tax, introduced in April 1989 at a 3 percent rate, was raised to 5 percent in April 1997 and then to 8 percent in April 2014.

The increase in the tax rate to 10 percent was “outrageous,” said Yukio Edano, head of the main opposition Constitutional Democratic Party of Japan, at a party meeting Tuesday.

“I want to play the role of passing on the confusion on the ground to national politics,” he added.

During its campaign for the House of Councilors election in July, the CDP had urged the government to put the tax hike on hold.

But the party is also cautious about plans by Reiwa Shinsengumi and the Japanese Communist Party to submit legislation cutting the rate back to 5 percent, out of concern that changing the tax rate again would only add to the confusion.

“If we argue for lower taxes, we will definitely be asked how we are going to pay for it,” a senior CDP official said.

Also thought to be behind the CDP’s wariness is the creation of joint caucuses with the Democratic Party for the People and other opposition lawmakers in both chambers of the Diet last month.

The caucus for the House of Representatives has been joined by former Prime Minister Yoshihiko Noda.

In 2012 Noda led moves to raise the tax rate to 10 percent, securing agreement between his now-defunct Democratic Party of Japan — then the ruling party — and the Liberal Democratic Party and Komeito who form the current ruling coalition.

DPP chief Yuichiro Tamaki said Tuesday, “I want to decide on a position after monitoring the economic situation,” breaking from his earlier willingness to submit legislation to lower the tax rate back to 8 percent.

“We want to submit (such legislation), but we would be told that we are ‘out of step’ with the CDP — although the two parties tied up (for the joint caucus) only recently,” a senior DPP official said.

Taro Yamamoto, leader of recently launched political party Reiwa Shinsengumi, is pushing for the consumption tax rate to be lowered back to 5 percent.

“I am proposing that opposition parties fight the next (Lower House) election with a common policy goal to lower the tax rate to 5 percent,” he said in a street speech on Tuesday.

JCP head Kazuo Shii, who has been seeking to boost cooperation with Yamamoto’s party, also took to the streets, calling for lower taxes. “A cut in the tax rate to 5 percent is a fair demand to make.”

Reiwa Shinsengumi aims to make the policy to cut the rate to 5 percent a prerequisite for cooperation among opposition parties for the next Lower House election. A rift over the proposal could affect any coordination between them to select candidates for the poll, pundits have said.