The ruling Democratic Party of Japan (DJP) has worked out its policy platform for the upcoming House of Councillors election, centering on "drastic" reform of the country's tax system, including raising the consumption tax rate and cutting corporate taxes.
The DPJ's campaign pledges for the upper house contest, widely expected to be held July 11, were compiled Friday (June 11) at a meeting of the party's policy platform council, chaired by Prime Minister Naoto Kan, at DPJ headquarters.
Participants included Chief Cabinet Secretary Yoshito Sengoku, DPJ Secretary General Yukio Edano, DPJ policy chief Koichiro Gemba and Azuma Koshiishi, leader of the DPJ's upper house caucus.
"I'd like to see you devise specific electoral pledges vigorous enough to buoy our party in the run-up to the upper house election," Kan was quoted as telling them.
The pledges are in line with the policy goals Kan has expressed to achieve a "strong economy", "strong finances" and "strong social security". They aim to achieve three key goals - economic growth, fiscal consolidation and sustainability of the nation's social security programmes.
The pledges are divided into 10 catgories:
- Elimination of the wasteful use of taxpayers' money and revamping the civil service
- Political reform
- Diplomacy and national security
- Child care and education
- Pensions, medical and nursing care services and the welfare of the disabled
- Employment
- Agriculture, forestry and fisheries
- Postal service reform
- Acceleration of the decentralisation of power to local authorities
- Transportation policy and public works projects
Also incorporated into the platform is a call Kan made earlier Friday in his first policy speech to the Diet to create a suprapartisan panel to discuss how to improve this country's debt-laden government finances.
It also promises to make passing a bill to scale back postal privatisation the top legislative priority at an extraordinary Diet session to be convened after the upper house election.
Regarding when to raise the consumption tax rate from the current 5 per cent, the DPJ election platform dropped wording that earlier had been considered within the party of hiking the tax rate "after the next House of Representatives election", which does not have to be held until 2013.
Analysts interpreted the deletion as implying the possibility of a consumption tax hike at an earlier date. Kan's predecessor, Yukio Hatoyama, had promised to leave the consumption tax rate unchanged until at least 2013.
On the subject of restoring fiscal health, the campaign platform said the DPJ-led government will aim to halve, by the end of fiscal 2015, the primary fiscal deficit ratio to gross domestic product from that in fiscal 2010.
After that is achieved, the government will press ahead with the goal of realising a primary balance surplus - a situation in which expenditures, not including debt-servicing costs, are covered by revenues excluding bond issuance - by the end of fiscal 2020.
As a step to live up to this commitment, the policy platform said the issuance of new government bonds from 2011 on would not exceed 44.3 trillion yen (US$483 billion), the amount of bond issues for fiscal 2010.
The platform essentially reneges on the DPJ's pledge in its election manifesto for last August's lower house election that the full amount of promised child-rearing allowances - 26,000 yen ($283) a month per child up through middle school age - would be paid from fiscal 2011.
"Taking into account the condition of government finances, a certain addition will be made to the current child-rearing allowance of 13,000 yen ($141) per month," it says.
The platform sets a goal of attaining nominal average growth in the economy of 3 per cent per year up through the end of fiscal 2020, with growth after inflation at an annualised 2 per cent.
It names 13 measures to be implemented toward this goal, including lowering corporate tax rates and creating "comprehensive special economic zones", designated areas where drastic deregulation, tax reduction and subsidies will help boost regional economies.
The two key policy pledges in the campaign promises for the upper house election - drastic fiscal reform and reconstruction of government finances - were not included in the DPJ's manifesto for the last lower house election, indicating Kan is putting his stamp on the government, the analysts said.
