Japanese politics

Hair shirts

The Prime Minister stakes his all on an unpopular and intractable issue

Mar 24th 2012 | TOKYO | from the print edition

IF THERE is one bedeviled policy around which Japanese politicians have chased their tails for more than a decade, it is the consumption tax on goods and services. Yoshihiko Noda, the Prime Minister, appears ready to stake his premiership on raising the tax for the first time since 1997.

As The Economistwent to press, the ruling Democratic Party of Japan (DPJ) was tweaking a draft bill to increase the tax from 5% today to 8% in 2014 and 10% a year later. Once approved by the cabinet, Mr Noda hopes next week to present the bill to parliament. It is expected to cause such a battle this spring, both on ideological and political grounds, that some believe Mr Noda may be forced to call a general election should he fail to get his way.

The ideological division, crudely put, is between debt-alarmists and the deflation-weary. Supporters of a rise in the consumption tax point to a bulging government debt and ageing population. They say raising the rate, the lowest for a sales or similar tax among OECD countries, is the fairest way to prevent fiscal ruin. Opponents say that with Japan’s economy still mired in deflation, more frugality is the real menace, along with the Svengalis in the finance ministry who advocate it.

The politics is equally fraught. The DPJ is split. Ichiro Ozawa, a controversial fixer who leads the biggest faction within the party, is staunchly opposed, arguing that it will bring electoral disaster—as it has to all governments that have sought to raise the tax in the past.

The party’s chief rival is the Liberal Democratic Party (LDP). In upper-house elections in 2010, it proposed a rise in the consumption tax to 10%, yet has so far refused to co-operate with the DPJ in drafting the bill. The LDP’s leader, Sadakazu Tanigaki, has repeatedly demanded that Mr Noda call an election before putting a bill to the vote. He appears to want a tilt at the Prime Ministership before he comes up for re-election as party chief in September.

Yoshimasa Hayashi, a senior LDP man, says there is an even chance that the bill could be approved. He acknowledges his party would be considered “infantile” by voters if it blocks a bill for self-interested ends. However, the concessions he believes the governmentshould make in order to win his party’s approval, including dropping plans for a more generous pension system, are likely only to deepen the rift within the ruling party. One way to improve the bill’s chances, either before or after an election, would be for the pro-tax politicians from both parties to forge an alliance, something that the press dubs a “grand coalition”. Unconfirmed reports claim that Mr Noda has secretly discussed the possibility with Mr Tanigaki, though nothing seems to have come of it. Mr Hayashi says that the two sides are too far apart on other issues, such as foreign policy (where the LDP is more hawkish) and labour relations (where it is more pro-business), to agree to a coalition. Similar ideas were mooted before his party lost its grip on power in 2009. Renewing the idea, Mr Hayashi says, would confuse voters.

That said, there is a danger for both main parties should a parliamentary stalemate force Mr Noda to call a snap election. Lurking in the background are parties outside the mainstream. Increasingly, these are preying on voters’ dissatisfaction with the unappetising old guard.

The most talked about is a new party led by the outspoken mayor of Osaka, Toru Hashimoto. It mixes a tea-party-like disdain for big government and labour unions with a nationalism that horrifies the left. Mr Hashimoto’s Osaka Restoration Party has not been tested on the national stage, so the threat is hard to quantify. Mr Hayashi says that Mr Hashimoto’s new group, and other small parties, are becoming forces to reckon with. Moreover, Mr Hashimoto’s party may be one that the LDP could do business with. The LDP may be keener on making common cause with the anti-union Mr Hashimoto than forging a pro-tax alliance with the DPJ. Yet what is bad for the DPJ is also likely to be bad for the LDP. Opinion polls suggest voters have lost faith in both of them. A lower-house election might mean neither main party wins an outright majority. And the consumption tax change might therefore remain as elusive as ever.

from the print edition | Asia

Hair shirts

Mar 29th 2012, 10:52

Democratic Party of Japan (DPJ) has been the ruling party for more than 2.5 years. The mainly interior policy originating from Fabianism is to build the socialist political arena, which partly includes the reform to the tax for the fair reason such as facing the aged society. The dispute over consumption tax began to war between DPJ and the opposition Liberal Democratic Party (LDP) since last November when LDP President Sadakazu Tanigaki put forward the question of what Prime Minister Yoshihiko Noda was doing against the manifesto of last September’s takeover.

According to NHK World yesterday, the Cabinet is scheduled on March 30 to approve the measure to raise the sales levy to 8 percent in April 2014 and 10 percent in October 2015, DPJ tax-panel chief Shinichiro Furumoto told reporters. Given this situation, we can see two points of view separately by credit and the ordinary’s per capita of GDP.

In this month, Standard & Poor rates Japan AA and has had a negative outlook since April. The worsen credit may affect bond, infrastructure and Nikkei share market. There are still big financial sectors and service which have the ability to absorb the decline or affect the interest rates or yen against U.S. Dollar and so on, but the lack of whole economy’s confidence may lead to government’s decline of vision.

Moreover, if government uses the way to increasing tax for expanding the source of finance, people is hard to feel the welfare directly and immediately only to burden the ordinary with the routine life although DPJ already takes the preview of gross economy’s growth trend into consideration. Japan’s per capita of GDP decreases obviously after then Prime Minister Koizumi Junichiro’s structural reform, although some economics index indicated gross economy get much healthier than the past 10 years. DPJ finally deals with the dilemma of attention to both interior stagnant situation and the social welfare taking measure of a rise in the most widespread range’s consumption concerned.

In certain circumstances, the rise in this such tax is needed for the public affair, but too high tax must result in the opposition against the ruling government anyway. Too high tax becomes declined behaviour of consumption, also following the high risk of losing power. Comparing with the present 5% consumption tax and based on the per capita of GDP, the accommodation is the target of about 7-8%. The remembrance is still fresh while talking of fiscal measure by LDP’s last Prime Minister Taro Aso, whose thoughts lost the support from Japanese. So it isn’t sensible to realize DPJ’s whole blue print.

While this month was beginning, deputy Prime Minister Katsuya Okada sought cooperation when he met former foreign minister Nobutaka Machimura, one of the leaders of the Liberal Democratic Party. Besides, Nodas tax plan is facing opposition from members of his party, especially former party leader Ichiro Ozawa and former Prime Minister Yukio Hatoyama. And although both DPJ (32%) and LDP (21.4) got fewer support from Japanese by Fuji TV’s survey last month, in the short time, Mr. Noda cannot be substituted from Diet and several local parties, as the Economist said in this article, might remain the same territory.

According to Stratfor’s report several days ago, these kinds of style called “regionalism”, which flourishes recently due to Mr. Koizumi’s adjustment of government’s structure by reducing the size of government and instituting a reorganization of the administrative apparatus. This adjustment, relative to Mr. Koizumi’s idol Oda Nobunaga, resulted in the rise of regionalism somehow like surroundings of Tokugawa Period. Basically, during LDP’s 54-year long-term reign in Japan, almost of Japanese post-war politics depends on LDP and few parties with few fame. The well-known exception is only Ishihara Shintaro, incumbent Tokyo’s mayor. And young DPJ, founded in 1986, got the ruling power with numerous formidable strive in addition to the reliance on some compromise between DPJ and local faction.

The report referred to the two parties for examples. “In late 2010, Genzei Nippon ("tax reduction Japan") won Aichi prefectures governorship as well as the mayorship in Nagoya and a majority in its city assembly. Then in 2011, Osaka Ishin no Kai ("Osaka Restoration Association") won Osaka prefectures governorship, Osaka citys mayorship and majorities in both the prefectural and city assemblies.” Among these, the most important figure is Governor of Osaka prefecture Toru Hashimoto winning in 2008 due to his young image of vitality. Their location-inclined policy is hard to integrate with each other while LDP and DPJ keeps the low confidence of Japanese. The low popularity of politics in young generation for national politics must lead to the decline of Japan, having no interest in Japan as well as international politics although Japan has robust law and principles exercising politics.

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這篇僅有一些小瑕疵要修，大部份是語句的文法小問題，沒有太大地影響原意。「Comparing with the present 5% consumption tax...」Compare是vi用法，但是「...Taro Aso, whose thoughts lost the support from Japanese.」是whose thoughts 「help」 lose比較不會有中式英語。「So it isn’t sensible to realize DPJ’s whole blue print.」有一字多義的語病，是在表示說DPJ的理想應該不太容易達成，而且野田佳彥若實施增稅，則不一定符合民眾像當年讓鳩山由紀夫上台那年般的對社會福利的期待。如果造成這句「Its insensibly expected that DPJ attained the goal of the Fabianist full blueprint of social welfare, if the suggestive application of larger governants finance can neither meet the peoples demand nor solve the fundemental problem.」

這裡是提及消費稅漲價作為當時執政黨日本民主黨作為福利政策的財政來源，也變成最頭痛的問題。自由民主黨當年也是提出增加消費稅，但是拿來做經濟建設發展，及刺激消費的適度通貨膨漲。此時DPJ大致上支持度還是贏LDP，不過這時的日本兩大黨都正為「區域主義」的演化的十字路口及年紀世代的交替而都各有矛盾。這個區域主義是小泉純一郎擔任首相時的新右派論點之中，「小而美政府」的行政官僚體系施行方面起了副作用，因此很多在地的公務員及民意代表也「小而美」，搞成日本在那一兩年，地方層級的政ˋ治越來越相近於小泉前首相的偶像織田信長時期的日本安土桃山戰國時代。民主黨自身當時也無法擴大勢力，而是靠和這些前自民黨解體的「碎片」和新興極右派的大阪方面的橋下徹和長期擔任東京都知事石原慎太郎結盟或有些政治交易來維持政局。當時鳩山和菅直人與野田的日本民主度是戰後最高的時期，這增稅附近的爭議算起來很像從清靜無爭的德川幕府到壓力漸增的戰國割據。反政治的政治也使得日本的前途在此時稍微被疑慮，因此民主黨的絕對支配國家級及大部份地方政治的態勢此時已有了漣漪，安倍晉三的奪回政權隨著之後的民眾渴望國力的強大而再次使日本繁華了再一代。