Okada’s reform panel seen as opening gambit to tax hike

Deputy Prime Minister Katsuya Okada has set up a panel on administrative reform in an effort seen by some as a pretext for raising the consumption tax.

Citing Charles Darwin's theory of evolution, Okada told the panel’s first meeting on May 7 that the government must become more “efficient and powerful.”

Both Okada and Prime Minister Yoshihiko Noda, who told the meeting that the public is calling for downsizing the government, believe the government must streamline itself further before asking taxpayers to shoulder greater burdens through sales tax increases.

The panel’s 10 members, which include influential business leaders such as Kyocera Corp. honorary chairman Kazuo Inamori, will discuss cutting personnel expenses of public servants and deregulation.

But the government has not defined any specific goal it plans to achieve over the mid- to long term.

The first meeting discussed the significance of administrative reform, a basic topic. Some members voiced dissatisfaction with administrative reform being discussed as a precondition for raising the consumption tax.

The division of roles with existing government organizations, such as the Government Revitalization Unit and the Council on Administrative Reform, is also unclear.

The new panel is set up as a private study meeting for Okada, without any legal basis. It has no plans to make recommendations.

An official at the secretariat for the Council on Administrative Reform said all Okada wants to do through the new panel is to raise the consumption tax rate.

Okada modeled the panel after a high-profile administrative reform council chaired by Toshio Doko, former chairman of Keidanren (Japan Business Federation).

The advisory council led by Doko was established in 1981 based on law as an investigative and deliberative body for the prime minister. The government presented broad visions, especially reviews of public corporations.

The council called for privatizing the Japanese National Railways and the Nippon Telegraph and Telephone Public Corp., which was later implemented. Its goal was to rebuild public finances without raising taxes.

Jiro Ushio, chairman of lamp manufacturer Ushio Inc., who served on Doko’s council, said the panel had clear goals, such as realizing a vital aging society and a prosperous Japan.

“Administrative reform entails efforts over a span of 30 years,” Ushio said. “It is rude if the panel is designed for a short-term goal of having a bill pass the Diet.”