Restore Diet function to revive economy
Prime Minister Naoto Kan's administration suffered a crushing defeat in Sunday's House of Councillors election. The result has created a serious problem for his government--a so-called divided Diet, in which the opposition parties control the upper house and the ruling parties the lower house.
Given this situation, the prime minister should drastically review the handout measures contained in the manifesto created by the Democratic Party of Japan last year and seek cooperation from the opposition parties.
The results of the upper house election, which was a chance for voters to give their interim assessment of the change of administration, were more severe than expected for the ruling coalition parties.
The DPJ won only 44 seats, 10 seats less than its preelection strength, and the People's New Party, the DPJ's junior coalition partner, could not obtain any seats at all. Consequently, the coalition parties--including an independent who was backed by the coalition parties--now hold a total of 110 seats, 12 short of 122, a majority in the upper house.
The Kan administration has postponed making changes to the Cabinet and the DPJ leadership until the DPJ presidential election is held in September, when Kan's term as party president will expire.
But the road ahead is rocky.
At an extra Diet session to be convened at the end of this month, the prime minister is planning only to elect the president and vice president of the upper house. However, if his administration fails to cooperate with any opposition party before the next extraordinary Diet session in autumn, the prime minister will not be able to pass any important bills and will have difficulty managing the government.
After a major victory in the 2007 election, the DPJ and other opposition parties controlled the upper house. The DPJ employed hard-nosed tactics as it faced off against the Liberal Democratic Party-led government and its ruling coalition regarding the appointment of a Bank of Japan governor and other important issues, focusing on creating a favorable political situation for itself.
Even after becoming the ruling party, the DPJ repeatedly used its numerical strength to ignore traditional practices concerning Diet deliberations during this year's ordinary Diet session. The party used high-handed methods worse than those the LDP had employed to steer Diet business and deepened its split with the opposition parties.
Now that the opposition controls the upper house, however, the Kan administration will have to acknowledge that the opposition parties may seek "revenge," so he must manage Diet affairs in a nonconfrontational manner based on reaching consensus.
In the latest upper house election, voters decided to prevent the DPJ from running wild rather than support the DPJ-led coalition government. However, that does not mean they want a lame-duck government unable to pass important bills in a divided Diet.
Japan is facing many challenges.
Leaders of the Group of 20 developed and major emerging countries set a goal at their summit meeting last month of restoring fiscal soundness while maintaining economic growth. Japan also made an international pledge there to simultaneously achieve economic growth and fiscal health.
Now the government has to start reviewing public pension and other social welfare systems, and try to mend Japan-U.S. relations that were strained under the administration of former Prime Minister Yukio Hatoyama.
To tackle these issues, the Kan administration must make policy concessions with the opposition parties and seek their cooperation.
Leaders in various sectors are voicing their concerns about a possible political stalemate.
"The government should not postpone processing the mountain of issues due to the divided Diet," said Hiromasa Yonekura, chairman of the Japan Business Federation (Nippon Keidanren).
Currently, every opposition party is refusing to form a coalition with the DPJ. Your Party leader Yoshimi Watanabe said Monday that the division between the upper and lower houses demonstrates the will of the public today, and demanded the prime minister resign.
Manifesto must be revised
However, all the opposition parties are leaving room for a "partial" coalition with the government, in which the ruling and opposition parties may work together depending on the issue.
For example, the Kan government is expected to work together with Your Party to reform the civil servant system and with the LDP on social welfare policy and reform of the taxation system.
Of course, the opposition parties have various motives, so cooperation between the ruling and opposition parties may not be easy. However, the major requirement for any cooperation will be a drastic revision of the DPJ's manifesto.
The Kan government should admit the failure of the DPJ's handout measures that lack financial backing, such as the child-rearing allowances and abolition of expressway tolls. It should offer an explanation and an apology to the public.
The DPJ lost in the upper house election not because Kan mentioned an increase in the consumption tax rate but because he was inconsistent in his remarks and actions. Kan is contradicting himself as he advocates a thorough cut in government expenditures while continuing handout measures.
Public understanding of the need to increase the consumption tax rate is deepening as social welfare-related spending is increasing by 1 trillion yen a year.
It is important for the prime minister to reach an agreement among the ruling and opposition parties on the details of a hike in the consumption tax rate, such as when and how much it should be raised. The LDP should not only criticize the government and the ruling coalition but also respond positively to talks between the ruling and opposition parties.
Don't rush to Ozawa
Meanwhile, a group of DPJ members, including those close to former DPJ Secretary General Ichiro Ozawa, is questioning the responsibility of current Secretary General Yukio Edano and other party executives for the party's debacle in the upper house election. Efforts to field a candidate against Kan will become increasingly active ahead of the party presidential election scheduled for September.
This will require difficult maneuvering by the prime minister.
However, Kan should not easily join hands with Ozawa to quickly restore party unity. He should not allow Ozawa to control the DPJ again by compromising on the consumption tax rate and other political issues.
Kan must remember that his administration enjoyed a high approval rating immediately after its inauguration because the public approved of his efforts to eliminate Ozawa's influence.
The prime minister has decided to keep Justice Minister Keiko Chiba, who lost her Diet seat in Sunday's election, in her current post until after the party presidential election in September. He said this was to maintain continuity in the administration, but it seems Kan actually wanted to avoid confrontations and confusion within the party over the selection of her successor.
There is little precedent for a person who has lost his or her Diet seat to stay in a ministerial post for more than a month. Though Chiba's post is not as important as the finance and foreign ministers, the popular judgment regarding Chiba should be taken more seriously. We question Kan's decision to retain Chiba as justice minister.
(From The Yomiuri Shimbun, July 13, 2010)