Kaoru Yosano, a harsh critic of Japan’s ruling Democratic Party of Japan (DPJ), has joined with his erstwhile enemies to tell voters an “inconvenient truth” — a sales tax rise is needed to fund the bulging costs of an aging society.
However, skepticism runs deep whether Yosano, a former finance minister who spent most of his career in the rival Liberal Democratic Party (LDP), can help break the sales tax curse that has tripped up Japanese Prime Minister Naoto Kan and a string of past leaders.
“Markets do respect Kan’s drive for fiscal reform and do have some hopes, but I’m quite doubtful as to how much he can achieve,” said Jun Fukashiro, chief fund manager at Toyota Asset Management. “Market expectations for change are zero. That doesn’t change much with Yosano joining the Cabinet.”
Yosano pitched his well-known position that Japan must raise its 5 percent sales tax in a book last year entitled The Democratic Party of Japan will destroy the Japanese economy.
“Telling the truth means speaking an ‘inconvenient truth’ — even if it will hurt your election chances ... or be temporarily criticized by the public,” Yosano wrote. “It is impermissible to turn our backs on fundamental tax reform.”
His harsh critique of the DPJ has come back to haunt Yosano since he switched political sides to take up the economics minister portfolio in a Cabinet reshuffle last week.
Yosano faces heavy fire in a parliamentary session starting next week from his former colleagues in the LDP, from which he bolted last year to set up a new party, but at 72, the one-time contender to be prime minister seems unlikely to be fazed.
The grandson of two well-known poets, Yosano — who took time off from politics after surgery for throat cancer in 2006 and barely kept his seat in parliament three years later when the DPJ swept to power — may feel he has little to lose.
“He is old and has been ill in the past,” Sophia University professor Koichi Nakano said. “He figured this time, he had to do something and because of his reputation as a policy expert, he was able to join the government in the name of the national interest.”
Yosano has been echoing his dire warnings about Japan’s fiscal health since taking office in Kan’s government.
“Japan’s fiscal policy will hit a dead end if it is left as it is,” he said after his appointment, adding that Japan risked losing international credibility and a rise in long-term interest rates longer term if it failed to act.
Kan’s new agenda marks a sharp shift from the DPJ’s platform in 2009, when predecessor Yukio Hatoyama pledged to put more money in consumers’ hands to boost growth and tried to put a lid on talk of a future sales tax rise. Kan took over as prime minister after Hatoyama quit in June last year following a steep slide in his ratings.
Yosano has rejected the “fiscal hawk” label as too simplistic. In fact, he helped draft a ￥27 trillion (US$326 billion) stimulus package in 2009. Paying back public debt, he says, requires a mix of other tax hikes, spending cuts and a growth strategy to raise tax revenues.
Yosano also advocates central bank independence, making his return to government welcome to the Bank of Japan.
Kan may have hoped that Yosano’s appointment would smooth talks on policy with the opposition parties that control parliament’s upper house. Instead, it has outraged the LDP, which brands him a traitor.
SEE JAPAN ON PAGE 10
‘LIKE A CASSANDRA’: Chinese residents of Prato went into self-imposed lockdown and warned their Italian neighbors about what was coming, but were ignored In the storm of infection and death sweeping Italy, one big community stands out to health officials as remarkably unscathed — the 50,000 ethnic Chinese who live in the town of Prato. Two months ago, the country’s Chinese residents were the target of what Amnesty International described as shameful discrimination, the butt of insults and violent attacks by people who feared that they would spread the coronavirus through Italy. However, in the Tuscan town of Prato, home to Italy’s single biggest Chinese community, the opposite has been true. Once scapegoats, they are now held up by authorities as a model for early,
Reporters Without Borders has accused the Algerian government of taking advantage of the COVID-19 pandemic to “settle scores” with independent journalists, including those covering long-running anti-government protests. In a statement signed with Algerian non-governmental organizations, the watchdog on Thursday called for the immediate release of its correspondent, Khaled Drareni, who has been in pretrial detention since Sunday after being charged with inciting an unarmed gathering and endangering national unity. Drareni has been arrested several times for covering the “Hirak” anti-government protests held in the capital, Algiers, every Friday since February last year. Imprisoning people during a pandemic is “an act of physical endangerment,”
Vietnam has lodged an official protest with China following the sinking of a Vietnamese fishing boat that it said had been rammed by a Chinese maritime surveillance vessel near islands in the South China Sea. The Vietnamese fishing vessel, with eight fishermen onboard, was fishing near the Paracel Islands (Xisha Islands, 西沙群島) on Thursday when it was rammed and sunk by the Chinese vessel, the Vietnamese Ministry of Foreign Affairs said in a statement posted on a government Web site yesterday. All of the fishermen were picked up by the Chinese vessel alive and were transferred to two other Vietnamese fishing vessels
DIVIDED YOUTH: There is a belief that overseas students see themselves as superior, which is compounded by perceptions of their extreme wealth and multiple nationalities Chinese students flying home from overseas to escape the COVID-19 pandemic face a frosty reception from sections of the public who view them as wealthy, spoiled — and potentially contaminated. The number of officially reported cases in China has dwindled dramatically over the last month, but the country is now taking drastic steps to try and stem a second wave of infections brought in from abroad. With most international flights canceled and nearly all foreigners barred from entering the country, the vast majority of returnees are Chinese nationals, including many students. The situation has exposed animosities over class and privilege in Chinese society,