EDITORIAL: Abe’s decision to delay tax hike made without proper debate
Raising the consumption tax rate to 10 percent is a decision that would affect the lives of Japanese people, present and future. A matter of such import must never be left to the discretion of the prime minister alone, nor be settled in the absence of scrutiny by the government and the ruling coalition and thorough Diet deliberations.
But Prime Minister Shinzo Abe has announced yet another postponement of the tax hike, this time for two-and-a-half years, scrapping the scheduled increase in April next year.
Abe dropped this bombshell just days before the June 1 adjournment of the current Diet session. Throughout the past 150-day session, Abe talked of the planned tax hike as a foregone conclusion, saying it will happen “unless the nation is impacted drastically by something like the ‘Lehman shock’ or a catastrophic earthquake.”
The process leading up to Abe’s decision on the postponement was definitely irregular. Not one debate was held within the ruling Liberal Democratic Party or the government or the Diet to examine Abe’s proposal. Instead, Abe summoned his senior Cabinet ministers and party executives in person and sought their approval.
Finance Minister Taro Aso was practically the only Cabinet member who firmly opposed the postponement, reminding Abe that the last time the tax hike was delayed, the administration had promised that the increase would be effected for certain in April 2017.
But even Aso readily backed off in the end. He was quoted as saying, “If the prime minister says so.”
This whole affair is quite symbolic of the distorted nature of the Abe administration’s power structure. With Abe holding and exercising extraordinary power and authority, all the ruling coalition could do was to endorse whatever policy he decided, with no questions asked.
The Diet adjourns on June 1, having rejected a no-confidence motion against the Abe Cabinet, filed on May 31 by four opposition parties.
Abe's arbitrary decision to postpone the consumption tax hike is such a huge issue that the normal thing to do now is to extend the Diet session for serious discussions among the ruling and opposition camps. Numerous points require scrutiny.
For instance, how appropriate was Abe’s assertion, made abruptly during the Ise-Shima Group of Seven summit, that the global economy is at risk of falling into a crisis?
How will the postponement of the consumption tax hike affect the nation’s social security system and fiscal rehabilitation program, and what countermeasures should be taken? Where should the funding for the countermeasures come from?
Another question that must be raised is whether the postponement is part of the ruling coalition’s campaign strategy for the upcoming Upper House election.
Questions must also be posed to the opposition Democratic Party.
During a debate between party leaders in mid-May, Democratic Party President Katsuya Okada pointed out the inevitability of postponing the tax hike because of anemic consumption. In other words, it was the Democratic Party that opened the doors for the delay.
But let us recall the concept of “integrated reform of tax and social security systems,” initiated four years ago by the then-Democratic Party of Japan administration of Yoshihiko Noda and endorsed by the LDP and Komeito.
The basic purpose of these simultaneous reforms was to raise the consumption tax and use the tax revenue to deal with the nation’s bloating social security costs. This was going to cause pain to the current generation of taxpayers, but the point was to minimize the debt burden of the next generation. We must remember this spirit.
Abe is scheduled to explain the tax hike postponement at a news conference after the conclusion of the current Diet session today.
We also expect a clear explanation from Okada when he and Abe present their arguments during the Upper House election campaign.