A policy pledge made by the Democratic Party of Japan before it came to power in 2009 may yet come back to haunt the ruling party.
In its campaign manifesto, the DPJ outlined its plans to revamp the basic pension program.
Now, the opposition camp has called on the DPJ to explain its proposal before joining multipartisan discussions on the Noda administration's unpopular proposal to raise the consumption tax rate, now at 5 percent.
This presents a dilemma for the DPJ as it decided last year to shelve its plan to reform the pension system on grounds it would prove disadvantageous to many salaried workers.
Yet, some DPJ executives say they are willing to explain what the party had in mind when it came up with the policy pledge.
"If it becomes a condition for the start of serious discussions between the ruling and opposition parties, we will have to respond in a positive manner as best we can," Deputy Prime Minister Katsuya Okada said Jan. 25, referring to the opposition request.
While not offering specifics, Okada said the party still intends to submit proposed legislation next year on reforming the pension system.
In light of that, he said, the DPJ at some point will be obliged to explain its policy.
DPJ executives are eager to appease the opposition parties so that discussions can get under way on simultaneous reform of the taxation and social security systems.
The opposition New Komeito has called on the DPJ to present its overall plan for reforming the social security system.
The main component of the DPJ's pension proposal is to combine the three separate pension programs now in place into a single system and to establish a minimum pension payout of around 70,000 yen ($900) a month.
In the spring of 2011, the DPJ calculated what government revenues would be required to fund the new pension system that it envisages being in place in fiscal 2075.
It said additional annual revenues of 25.6 trillion yen would be needed over the amount that would be required if the current system remained unchanged.
To fund that amount, the consumption tax rate would have to be raised by an additional 7.1 percentage points over the current plan to hike it to 10 percent.
If the proposed new pension benefits were distributed in a manner that favored those in lower income brackets, only about 75 percent of people paying into the system would be eligible to receive the minimum pension.
Individuals whose lifetime annual average income was 4 million yen or more would receive less pensions under the new system. For that reason, salaried workers who are covered by corporate pension programs would lose out under the proposed system.
A high-ranking welfare ministry official said: "Not only would the burden increase with the higher tax rate, but many people would receive a smaller pension. There is no way we could openly present such a proposal."
Senior administration officials involved in the calculations decided there was no mileage in making the figures public.
Last June, when Naoto Kan was prime minister, the administration compiled its proposal for simultaneous reform of the taxation and social security systems. But it never mentioned the DPJ's minimum pension proposal.
Given that background, a Cabinet minister said New Komeito made the request knowing the DPJ would never be able to present the proposal and use that as an excuse for refusing to enter into multipartisan discussions.
DPJ policy chief Seiji Maehara initially showed a willingness to present the proposal, but he has since backtracked after learning what it entailed.
The DPJ's recent actions reflect a tendency to leap at various proposals before carefully considering the consequences, said a source in the Noda administration.
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