PM Noda faces crucial test in Japan sales tax vote

11:07 | 27/06/2012
Japanese Prime Minister Yoshihiko Noda was on Tuesday facing a sizable mutiny from his fractious party that could threaten his government, as lawmakers readied to vote on controversial tax bills.

Japan's Prime Minister Yoshihiko Noda (C) leaves after a lower house committee session at the Diet in Tokyo, on June 26. The lower house is to begin a plenary session which will see parliamentarians cast ballots on proposals to double sales tax in a bid to chip away at the country's huge debt mountain. (AFP Photo/Kazuhiro Nogi)

Legislation to double sales tax in an effort to chip away at Japan's mountainous debt was widely expected to pass a lower house ballot, despite a rebellion by up to a quarter of ruling party members.

But a looming split in the governing Democratic Party of Japan (DPJ), at least nominally provoked by the proposals, could see Noda lose his majority and force him to go prematurely to the polls, possibly within months.

Furious horse-trading between the DPJ and the two main opposition parties has all but guaranteed sufficient support for the bills, which will also revamp social security.

But estimates suggest up to 70 DPJ members, led by former powerbroker Ichiro Ozawa, are readying to vote against the tax rise, with some threatening to create a breakaway party.

Analysts say if 54 DPJ lawmakers in the lower house leave the party, the ruling coalition -- the DPJ and its minor partner -- would lose its majority in the chamber, which has the power to elect prime ministers.

The private TBS network reported Tuesday that about 55 lawmakers, mostly those in the Ozawa faction, were likely to vote against the bills.

Of these, around 40 are determined to leave the DPJ.

The Nikkei said in its online edition that of the 289 DPJ lawmakers in the lower chamber, the number not toeing the party line -- including those who are absent or intend to abstain -- may exceed 70.

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.

If that motion passes, the prime minister would have little choice but to go to the electorate, with opinion polls suggesting he would receive a drubbing.

Voting on the bills was expected to begin around 0600 GMT.

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, was unbowed Tuesday, telling a parliamentary committee 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.

AFP

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