As the campaign for the July 11 Upper House election officially kicked off Thursday, a consumption tax increase has cropped up as the main issue. This is because the ruling Democratic Party of Japan and the No. 1 opposition Liberal Democratic Party call for raising the tax.
Since the government's outstanding debt is expected to reach 200 percent of the nation's gross national product by the end of 2010, increasing tax revenues for the sake of financial reconstruction is inevitable. But in pushing for a consumption tax raise, the parties have to answer many questions.
As Japan is suffering from deflation and sluggish economic conditions, the DPJ and the LDP must show voters concrete measures and timetables to put the economy on a steady recovery path. They have to realize that unless the economy is put on a solid foundation, tax increases are impossible. The DPJ and the LDP must show a coherent mix of measures to achieve economic growth and financial reconstruction.