The main opposition Liberal Democratic Party on June 7 agreed to enter talks with the ruling Democratic Party of Japan on amending tax hike legislation, but opposition demands on other policies could derail the negotiations.
The LDP agrees with Prime Minister Yoshihiko Noda’s administration about the need to double the consumption tax rate in three years. However, the LDP is also calling on the DPJ to retract its social security policy, on which the tax revenue increase will be spent.
In effect, the LDP is expected to put pressure on the ruling party to rescind its 2009 Lower House election manifesto, which includes promises to create a minimum pension system.
Although social security will prove a thorny issue, Chief Cabinet Secretary Osamu Fujimura applauded the LDP's decision to enter the talks.
"I welcome progress in inter-party talks toward negotiations between the ruling and opposition parties," Fujimura told a news conference on June 7.
Ichiro Ozawa, a former DPJ president who leads the largest intra-party faction and opposes the tax hike proposal, had a different opinion. He warned against embracing the counterproposals of a party that the DPJ had ousted from power.
"That could lead to a destruction of party-based, democratic politics," Ozawa told a meeting of Lower House rookies of his faction at the Diet building on June 7. "Such an action would destroy the history of democracy."
The Noda Cabinet submitted the tax bills to the Diet on March 30. The legislation calls for the consumption tax rate to be raised from the current 5 percent to 8 percent in April 2014 and to 10 percent in October 2015.
The secretaries-general of the DPJ, the LDP and New Komeito, a smaller opposition party, discussed how to proceed on the tax bills at a meeting on June 6.
The following day, LDP leaders in an extraordinary meeting concluded that they expect the DPJ to arrange a Lower House vote on the tax hike bills before the current Diet session ends on June 21.
LDP President Sadakazu Tanigaki told the meeting that he will uphold three principles in dealing with the DPJ: reaching an agreement on the amendments by June 15 and holding a vote on the bills before the end of the Diet session; having the DPJ embrace the LDP's counterproposal on social security policy; and keeping the tax hike in line with previous LDP proposals.
The LDP leaders unanimously approved both the entry into the amendment talks and Tanigaki’s "three principles."
New Komeito on June 7 also decided to take part in the discussions on the amendments. "We will make arguments on our party's behalf during the course of the talks," a New Komeito official said.
During the secretaries-general meeting on June 6, both the LDP and New Komeito said they would not enter amendment talks unless the DPJ promised to hold a vote on the bills before the end of the Diet session.
Noda, in fact, had earlier ordered party members to arrange a Lower House vote before June 21, but DPJ Secretary-General Azuma Koshiishi had shown reluctance, feeling such a move could infuriate tax hike opponents in the ruling party and further split the DPJ.
On June 6, Koshiishi said he would respect Noda's intentions.
"Both Noda and the DPJ want to hold a vote by the session's end," Koshiishi said. "They agree on that point, and there is no difference whatsoever."
Tanigaki told the meeting of LDP leaders, "I decided to enter the bill amendment talks because Koshiishi asserted he would make every effort to reach (an agreement on the) amendments by June 15."
But even if the Noda government can reach an agreement on the amendments, the prime minister faces confrontation within his own party. Many DPJ members, including Koshiishi, are opposed to carrying out a vote on the tax hike bills during the current Diet session.
If the LDP manages to get Noda to schedule a Lower House vote on the bills, the rift will inevitably widen within the DPJ. Such confusion could prompt Noda to dissolve the Lower House and call a snap election--something Tanigaki has long been demanding.
Ozawa said both Noda and Tanigaki are ignoring the will of the people.
“Media surveys are gradually revealing what the public really has on their minds," Ozawa said. "They are saying 'no' to the DPJ government pressing ahead with the consumption tax (hikes) alone. If nobody cares about their election commitments, the public will have nothing to base their judgments on. No policy can become effective if there is no public trust."
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