Tax bill passage historic step toward fiscal soundness
The nation has taken a historic step toward solving the long-standing task of rehabilitating its heavily indebted public finances.
The Diet has enacted legislation to comprehensively reform the social security and tax systems, including a consumption tax hike. The bills were passed by the House of Councillors with support mainly from three parties--the Democratic Party of Japan, the Liberal Democratic Party and New Komeito.
After more than 200 hours were spent on deliberations in both chambers of the Diet, the legislation was passed by an overwhelming majority of lawmakers. We regard the move highly and hope it will prove to be a turning point in the nation's stagnated politics.
3 parties share responsibility
At a press conference following the enactment of the bills Friday, Prime Minister Yoshihiko Noda first referred to the DPJ's election manifesto, saying, "I'd like to deeply apologize that the [manifesto] did not mention consumption tax increases."
The work to implement the reform, which imposes a burden on the public, has just started. The government needs to work sincerely to broaden public understanding of the need for the changes.
With the legislation enacted, the consumption tax rate will be raised in two stages from the current 5 percent to 8 percent in April 2014 and then to 10 percent in October 2015.
Before the tax rate is increased, elections will be held for both houses of the Diet.
The sales tax hike is expected to become a contentious issue in the elections. Even though the election results may lead to a change of government and tax-hike opponents may gain momentum, the three major parties should continue to share responsibility for doubling the consumption tax.
LDP President Sadakazu Tanigaki has said the agreement reached by the three parties before the bills' enactment also covers economic measures intended to lay the groundwork for the tax increases.
Amid growing instability of the world economy, the nation must prevent the value of its government bonds from nosediving. It is vital to boost the credibility of the bonds by drawing up a solid road map for restructuring public finances.
The government is now expected to work out measures for low-income earners, which will be aimed at helping offset their burden from the tax increases, through year-end discussions on tax reform steps for fiscal 2013.
Reduced tax rates for certain items such as food should be introduced when the sales tax is raised to 8 percent. To protect the culture of printed matter and democracy, such measures should also be considered for newspapers and books.
Meanwhile, progress is likely to be made in reform of the social security system. A comprehensive child-rearing support plan would aim to reconstruct current social security measures and reallocate budgetary spending that now disproportionately focuses on the elderly. This reallocation would allow every generation to benefit from spending. The pension system is also expected to be revamped significantly by such steps as making part-time workers eligible for employee pension plans.
Opponents of the reform legislation who criticize "raising the tax before addressing social security system reform" are wide of the mark.
To counter such criticism, the three parties must swiftly launch the planned national council for revamping the social security system to start nationwide discussion of the feasibility of mid- and long-term systemic changes in social security arrangements. Discussion of the advisability of cutting back on social welfare benefits to boost efficiency of social welfare services, a subject that was not discussed in the three-party talks, is a must.
Prize accord of party heads
The resolve of Prime Minister Noda--who has said he will stake his political career on realizing the reform--made passage of the tax and social security legislation possible.
He finally reached a de facto agreement with LDP head Tanigaki on a "dissolution by mutual consent of the House of Representatives," although the timing of the dissolution was left vague in the three-party accord, which used the phrase "sometime soon."
During debates about the reform legislation, the fact that the DPJ's policy pledges in the 2009 general election were pies in the sky became all the more obvious, and the party was split when the lower house passed the reform bills. Intraparty moves are also growing to oust Noda from the DPJ's top post.
By making such a big sacrifice, the prime minister has remained unfaltering in his decision to place priority on the national interest. This is admirable.
When the reform bills were put to a vote in the upper house on Friday, six DPJ legislators voted against them. Noda should quickly take disciplinary steps against the six to strengthen his leadership as head of the ruling party.
Given that the Diet is divided, with the ruling camp lacking a majority in the upper house, the role played this time by the two major opposition parties--the LDP and Komeito--was significant.
Tanigaki, as chief of the largest opposition party, made a weighty decision when he chose to cooperate with the government and the ruling coalition.
Only Noda and Tanigaki could have realized the accord between the ruling and opposition blocs.
The DPJ, LDP and Komeito should maintain their cooperation to move the nation's politics forward so the pile of political tasks remaining can be resolved by transcending barriers between the ruling and opposition camps.
Narrowing vote gap essential
One problem in this connection is that DPJ Secretary General Azuma Koshiishi, referring to Noda's pledge to the LDP and Komeito that he would "seek the public's mandate sometime soon" by dissolving the lower house over the tax and social security reforms, has publically stated that the prime minister "does not have to stick to" his commitment.
Koshiishi has even said the three-party agreement would be nullified should the prime minister and Tanigaki fail to win reelection in their respective parties' presidential elections to be held in September.
Tanigaki was understandably enraged by Koshiishi's remarks, saying Koshiishi was "utterly ignorant of the basics of party politics and should be severely criticized," thus ratcheting up the LDP's confrontational stance against the DPJ.
Koshiishi's words and deeds, which are contrary to what the prime minister desires and also make light of the prime minister's promise with the LDP and Komeito, are outrageous.
To ensure an environment conducive to dissolving the lower chamber for a general election, it is indispensable to reform the electoral system.
The Supreme Court has ruled that the current disparity in the weight of votes between the most and least represented electoral districts is "in a state of unconstitutionality."
Should a lower house election be held without any measures to rectify the vote disparity because the legislature abdicates its duties, the judiciary could nullify the election results because they violate the Constitution.
Under the circumstances, the DPJ, LDP and Komeito must act urgently to narrow the electoral disparity by first realizing plans to reduce the number of lower house single-seat constituencies by five.
(From The Yomiuri Shimbun, Aug. 11, 2012)