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2014/11/14
Edano states “we have now reached a state of affairs where it is not possible to raise consumption tax”
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On November 14, DPJ Secretary General Yukio Edano held a special press conference at party headquarters. He commented on the proposed increase in the consumption tax rate to 10% scheduled to be implemented from October 2015 as stipulated in the Comprehensive Reform of Social Security and Tax, and announced that DPJ President Banri Kaieda had instructed Policy Research Committee Chair Tetsuro Fukuyama to work toward obtaining a consensus within the party that “we have now reached a state of affairs where it is not possible to raise consumption tax.”
Kaieda, Edano, and Fukuyama had met that same day with DPJ Supreme Advisor Yoshihiko Noda and Acting President Katsuya Okada, who had been serving respectively as Prime Minister and Deputy Prime Minister when the proposal for the Comprehensive Reform of Social Security and Tax was drawn up, to discuss the matter.
Edano reported on the conclusions of this meeting, stating, “There is no change in our stance that the Comprehensive Reform of Social Security and Tax is both important and essential, since it aims to achieve a sustainable social security system and secures the financial resources to support this. Its basic purpose is to enhance and stabilize social security provisions, so as not to overburden future generations with debt. However, in the Three Party Agreement [between the DPJ, the LDP and Komeito] the two major preconditions for asking the Japanese people to take on a greater burden are that: (1) in accordance with the law, the increased tax revenues shall be used only for enhancing and stabilizing social security, and (2) as promised in Prime Minister’s Question Time, thorough reforms of politics and public finance will be implemented, starting with reforms that affect Diet members themselves, in particular the reduction of the number of Diet seats. However, these two preconditions have not been implemented. Moreover, Abenomics has only succeeded in making the rich even richer, inviting the depreciation of the yen, undesirable price rises, falls in real wages and widening inequalities, and worsening people’s lives. Due to the Abe administration’s failure to keep their promises and poor management of the economy, many of the Japanese people are not currently in a state where they could be persuaded to take on a greater burden. If the Prime Minister intends to ignore this and go ahead with dissolving the Diet, then we have indeed reached a state of affairs where it is not possible to raise consumption tax.”
Noda also answered reporters’ questions, emphasizing the importance of the Comprehensive Reform by saying, “The significance of the Comprehensive Reform of Social Security and Tax is that it should be a reform based on the principle of realizing the enhancement and stability of social security and not simply passing the burden to the next generation.” He went on to criticize the LDP-led government, stating, “Tax increases are not an option considering that Abenomics has failed and the economy has not yet recovered. The Abe administration bears an extremely heavy responsibility for having failed to prepare the ground for increasing the tax.” Noda went on, “The trickle-down effect has not worked. All [Abenomics] has achieved is the dismantling of the middle class and the widening of inequalities. The DPJ will do our utmost to work to eliminate inequalities and to revive Japan’s robust middle class.”
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