Japan sales tax bill passes despite rebellion

June 26, 2012
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After months of furious horse-trading that brought the two largest opposition parties on board, the passage of the legislation had not been in doubt/FILE
TOKYO, Jun 26 – Lawmakers in Japan on Tuesday voted in favour of doubling sales tax, but a sizeable rebellion by members of the ruling party left Prime Minister Yoshihiko Noda’s future in doubt.

Legislation to hike consumption tax as part of an effort to chip away at Japan’s mountainous debt comfortably passed a lower house ballot, despite the votes of a wayward faction in the governing Democratic Party of Japan (DPJ).

After months of furious horse-trading that brought the two largest opposition parties on board, the passage of the legislation had not been in doubt.

Of the 459 votes cast, 363 were in favour, with 96 votes against. A tally by broadcaster NHK showed 57 members of the DPJ defied the party line.

The political future of Noda’s administration now hangs on whether those rebels will leave the party — a threat some of them, led by veteran dealmaker Ichiro Ozawa, have openly made.

If at least 54 of them follow through, the DPJ will lose its majority in the lower chamber, which has the power to appoint prime ministers.

Ahead of the vote, the private TBS network reported around 40 are determined to leave the DPJ.

If Ozawa’s mooted breakaway — still far from a certainty — has the critical mass to upend Noda’s majority, opponents will likely seize the opportunity and call a confidence vote.

That would leave the prime minister with little choice but to go to the electorate, with opinion polls suggesting he would receive a drubbing.

Noda, who has staked his premiership on a tax rise widely believed to be a sensible way for Japan to begin plugging its fiscal hole, applauded the result of the vote as it was announced Tuesday.

He had earlier told parliamentarians he would not waver.

“We must press ahead with reforms by considering not only the lives of people in the current time but also future generations,” he said.

“It would be irresponsible politics if we stall in front of this huge mountain.”

Tetsuro Kato, professor of politics at Waseda University, told AFP the governing party was “facing a crisis of break-up,” adding Noda may call snap elections soon, “depending upon results from the vote”.

Sadakazu Tanigaki, president of the largest opposition Liberal Democratic Party, which has swung behind the tax rise bills, told reporters a general election was in the “national interest”.

Noda has warned that the future of the world’s third-largest economy rests on tackling its hulking public debt, which at more than double the GDP, is proportionately the world’s largest.

Opponents of the planned tax rise from the current five percent to 10 percent by 2015 say any increase in household bills would derail Japan’s uncertain economic recovery.

The bill will now go to the upper house where it is expected to pass after deals Noda reached with opposition parties to navigate a chamber his party does not control.

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