Bloomberg News

Kan Aims to Pass Bills Before Resigning as Japan Premier

June 28, 2011

(Adds criticism of Kan appointment in eighth paragraph.)

June 28 (Bloomberg) -- Japan’s Prime Minister Naoto Kan said he intends to win passage of three bills responding to the earthquake and nuclear crisis before stepping down, defining for the first time conditions for fulfilling his pledge to resign.

Kan said he wants parliament to approve his second disaster recovery package, authorize the sale of deficit-covering bonds and enact a renewable energy bill in a session that was extended until the end of August. Six in 10 voters favor him quitting by then, according to a Nikkei newspaper poll published yesterday.

“I would very much like to see passage of these bills before relinquishing my responsibilities,” Kan told reporters yesterday after announcing changes to his Cabinet that included naming a lawmaker from the opposition Liberal Democratic Party. Kan said today he aims to draft the country’s next stimulus by mid-July.

Kan is under pressure from both the opposition and his own Democratic Party of Japan to step down over his handling of the March earthquake and tsunami that caused the biggest nuclear disaster in 25 years. Katsuya Okada, the DPJ’s No. 2 official, suggested on June 26 that Kan may leave next month if he can get his agenda through parliament.

Kan survived a June 2 no-confidence motion after pledging to resign once the crisis is contained. The conflict over when he will quit has complicated efforts to push through legislation, including authorizing 44.3 trillion yen ($547 billion) in government bonds needed to fund this year’s record budget.

Opposition Undermined

LDP leader Sadakazu Tanigaki said June 25 that “we will cooperate” in approving the next reconstruction package “speedily,” Kyodo News reported. Kan’s selection of Kazuyuki Hamada, who yesterday resigned from the LDP, as parliamentary secretary for internal affairs may undermine that cooperation, political analyst Yasunori Sone said.

“This will enrage the LDP and make it more difficult for Kan to get the bills passed,” Sone said. “A reshuffle by a prime minister who’s already said he will step down is unthinkable to begin with. The turmoil will continue.”

Ruling and opposition lawmakers today criticized Hamada’s appointment. National Strategy Minister Koichiro Gemba said he “didn’t understand” Kan’s intention, adding that “this has no doubt raised a hurdle in negotiations” over legislation. LDP Secretary-General Nobuteru Ishihara said Kan “seems to be trying to prevent the passage of the bills.”

Stimulus Plans

The new stimulus to cope with the devastation will be about 2 trillion yen, Okada said earlier this month. The government is considering about 230 billion yen in aid to Tokyo Electric Power Co., owner of the Fukushima nuclear plant crippled by the quake, and for radiation monitoring in its planned supplementary budget, according to a draft outline prepared by the Finance Ministry.

Officials will apply 1.8 trillion yen in tax revenue left over from the last fiscal year to help fund the package, according to the document, a copy of which was obtained by Bloomberg News.

The prime minister’s approval rating fell to 26 percent from 28 percent last month, while his disapproval rating rose to 65 percent from 62 percent, the Nikkei poll said. The newspaper surveyed 893 voters from June 24-26 and provided no margin of error.

Raising Taxes

The Japanese public is split over whether to raise taxes to pay for rebuilding from the disaster that left nearly 23,000 people dead or missing and crippled the Fukushima Dai-Ichi nuclear power plant. The Nikkei poll showed 45 percent in favor and 46 percent opposed.

A government panel on June 25 recommended raising taxes on income, consumption and corporate profits. Kan’s top economic advisers are calling for doubling the 5 percent sales levy to raise revenue and avoid adding to the world’s largest debt burden.

Kan yesterday named Environment Minister Ryu Matsumoto to the new position of reconstruction minister, and appointed DPJ lawmaker Goshi Hosono as minister for nuclear-crisis management. Justice Minister Satsuki Eda will take on the environmental post as well.

Kan also met with Shizuka Kamei, head of DPJ coalition partner the People’s New Party, who told reporters he turned down an offer to become deputy premier. Kamei said instead that he will become a special adviser to the prime minister.

--With assistance from Kyoko Shimodoi and Sachiko Sakamaki in Tokyo. Editors: Ben Richardson, Patrick Harrington

To contact the reporters on this story: John Brinsley in Tokyo at jbrinsley@bloomberg.net; Takashi Hirokawa in Tokyo at thirokawa@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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