Japanese prime minister Yoshihiko Noda won the backing of the main opposition parties for a contentious bill to double the sales tax. But their support, which ensures the bill’s enactment, came at a high price – a possible ruling party split led by the prime minister’s biggest rival.
Noda’s ruling Democratic Party of Japan and the two main opposition parties agreed Thursday to enact the bill to raise the tax to 10 percent by 2015 in the current parliament session, which was extended to early September. The bill is seen by supporters as a long overdue first step in curbing the country’s massive debt, now more than twice the size of the economy.
The deal comes after the DPJ failed to bridge the gap between the pro- and anti-tax-increase camps in the party after three days of talks. Critics of the tax increase say it goes against the promises the party made when it came into power in 2009, with some threatening to vote against the bill and bolt from the party.
“We believe that our views are right,” veteran DPJ lawmaker Ichiro Ozawa told reporters on Thursday, adding that he opposed the tax increase.
“I don’t have concrete plans now to leave the party or form a new one. But I would like to discuss with my colleagues what the best option is following the [lower house] vote,” said Ozawa, who heads the DPJ’s largest faction, with around 100 members.
The DPJ and the key opposition parties had been seeking a vote Thursday, but agreed to postpone it, aiming for Tuesday.
The bill is certain to pass the lower house on the back of support from the three largest parties. But a sizable revolt by the Ozawa group could result in the DPJ and its coalition partner losing their majority in the lower house, undermining Noda’s grip on power. The upper house is controlled by the opposition.
If 54 or more DPJ lower-house lawmakers leave the party, the ruling camp loses its majority in the 480-seat chamber. But it isn’t clear whether members of the Ozawa faction would take such a risk. Many are first-term lawmakers with weak bases of support.
No lower house election needs to be held until the summer of 2013. But the opposition parties are demanding Noda dissolve parliament for an election after the sales-tax-related bills pass.
Noda has said the tax increase is a vital first step to curbing Japan’s outstanding debt, now more than 200 percent of gross domestic product. Many DPJ lawmakers said they feel that in reaching a deal with the opposition, the party reneged on the policies that put it in power.
The tax increase wasn’t part of the DPJ’s 2009 policy platform. Moreover, the party agreed with the opposition to shelve its proposals for a more generous pension system and to revamp health care. -By George Nishiyama, Toko Sekiguchi and Alexander Martin