Realistic counterproposals needed from LDP
Prime Minister Yoshihiko Noda has declared it is "no exaggeration to say" he is staking his political life on passage of a package of bills for comprehensive reform of the social security and tax systems, on which Diet deliberations started Tuesday.
The ruling and opposition parties should make serious concessions with the aim of passing the bills as soon as possible.
During a question-and-answer session in the House of Representatives, Tadamori Oshima, vice president of the main opposition Liberal Democratic Party, referred to the current gridlock in politics under the divided Diet. "It is desirable to establish rules regarding negotiations among parties so as to form a new policymaking process," he said.
Oshima also expressed his party's willingness to join negotiations between the ruling and opposition camps, depending on the Democratic Party of Japan's handling of discussions on the bills.
It is noteworthy that momentum has been finally generated to move toward debate on the integrated reform.
To pass bills under the divided Diet, it is crucial for the government to gain cooperation from the LDP and other opposition parties. Noda must exercise his leadership to create an environment to elicit it.
The LDP has demanded the DPJ drop its plans to create a new pension system that would include a guaranteed minimum pension, as well as abolish a special health insurance system for people aged 75 and older. The two measures were among the major policies the party pledged in its manifesto for the 2009 lower house election.
Noda has only indicated he would leave a decision up to the DPJ. We believe, however, the party has no choice but to drop those policies to pave the way for the ruling and opposition parties to hold talks on the bills.
The prime minister instead urged the LDP to make "constructive counterproposals" on the comprehensive reform.
When it comes to the social security system, the opposition party's counterproposal is unlikely to significantly differ from the government's legislation on integrating corporate employees' and mutual-aid pensions because the current government's plan is almost the same as the one submitted in 2007 by the coalition government between the LDP and New Komeito.
We believe that it would not take much time for the ruling and opposition camps to reach a consensus as long as the LDP makes a counterproposal on this issue.
The LDP also should compile a counterproposal on raising the consumption tax rate, in which support measures for low-income earners would be a major focal point.
Examine reduced tax system
The government's bill to raise the consumption tax rate includes granting cash benefits to those with lower incomes, which might result in bloating the amounts of the planned cash allowances. The government would undermine the efficacy of the tax hike if it implements yet another handout policy at the same time.
In Europe, which has a tradition of value-added taxes, reduced tax rate systems have been adopted with the aim of lowering the taxes on food and other daily necessities, as well as newspapers and books.
The LDP has been examining the introduction of a reduced tax rate system apparently because it regards the mechanism as realistic in light of the European example. We propose the government positively study the system.
There is a concern, however, over Diet deliberations on the package of bills for the integrated reform. The LDP has set a precondition for holding discussions in a special committee: the replacement of Land, Infrastructure, Transport and Tourism Minister Takeshi Maeda and Defense Minister Naoki Tanaka, who were recently censured by the opposition-controlled House of Councillors.
However, neither of the two ministers have anything to do with the social security or tax systems. The LDP should decouple debate on the bill from calling for the ministers to be replaced.
(From The Yomiuri Shimbun, May 9, 2012)