Japanese Prime Minister Naoto Kan urged voters yesterday to give his party a clear win in a poll on Sunday to avoid political deadlock as he renewed a call for multi-party talks on a possible sales tax rise to curb huge debt.
Kan also warned against the risk of a hasty shift to tighten Japan’s fiscal stance, but added that the country could not keep relying on the sort of borrowing that has pushed its debt to nearly 200 percent of GDP, the worst among advanced nations.
Media surveys suggest Kan’s Democratic Party of Japan will likely fall short of a majority in the upper house election and may need to seek new allies, complicating efforts to implement policies including steps to fix Japan’s tattered finances.
PHOTO: BLOOMBERG
“There have been five prime ministers over the last four years. Will politics become even more confused and unable to decide anything, or can we bring back responsible, stable politics?” Kan said in a debate with other party leaders on NHK public TV.
“I would like the people to choose a responsible and stable government,” added Kan, who took over after former prime minister Yukio Hatoyama abruptly quit last month.
The Democrats, who swept to power last year pledging to cut waste and put more cash into the hands of consumers, will almost certainly stay in power regardless of the poll outcome due to its huge majority in the more powerful lower house.
However, Kan hopes to avoid a situation similar to that faced by his main opposition Liberal Democratic Party (LDP) predecessors after a 2007 election in the upper house deprived the then-ruling bloc of a majority in the chamber, making it difficult to enact bills smoothly.
The 63-year-old prime minister has made fiscal reform the core of his campaign in a risky shift since taking over from Hatoyama, who had vowed not to raise the 5 percent sales tax for four years.
But Kan, a former grassroots activist, reiterated yesterday that he would seek a mandate from voters in a lower house election, which must be held by late 2013, before raising the sales tax.
He also stressed the need to balance fiscal reform with economic growth and strengthening Japan’s social security system as its population ages.
“Too much fiscal austerity as well as rushing [to implement] an exit strategy would not be very good for either the Japanese nor the world economy,” Kan said.
“We have been relying on bonds to fill in the gaps. Is it possible to continue doing so?” he said, once again referring to the specter of the Greek debt crisis.
Most other party leaders, however, rejected Kan’s call for multi-party talks on tax reform.
The LDP agrees on the need for a future sales tax hike, but wants the Democrats to explain how this would mesh this with previous spending pledges.
The small pro-reform Your Party insists more waste must be cut before considering a higher sales tax.
Its leader Yoshimi Watanabe has repeatedly ruled out a tie-up with the Democrats.
Even if the Democrats and its current partner, the People’s New Party (PNP), keep their upper house majority, policymaking will not be smooth given the tiny PNP stance in favor of big spending and its opposition to raising the sales tax.
Kan needs a robust showing by the Democrats to fend off any post-election challenge from rivals within his party, such as powerbroker Ichiro Ozawa, that could make him the latest of the country’s revolving-door leaders.
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