Oct. 31 (Bloomberg) -- Japanese Prime Minister Yoshihiko Noda said he would call a general election before a proposed increase in the sales tax is implemented.
“I think we have to ask the people’s opinion before making that a reality,” he said today in parliament.
Noda backs former Prime Minister Naoto Kan’s proposal to raise the 5 percent consumption tax by the end of the decade to cope with Japan’s debt burden. The Cabinet last week submitted to the Diet a plan to temporarily raise corporate and income taxes by 11.2 trillion yen ($141 billion) to pay for rebuilding from the March earthquake and nuclear crisis.
Japan was already grappling with rising social welfare costs and government debt exceeding 200 percent of gross domestic product before the disaster struck. The country’s sovereign credit rating was cut by Moody’s Investor’s Service in August, which cited political instability and “weak” economic growth prospects.
“We must stabilize our fiscal situation to effect social welfare reform,” Noda said today.
--Editors: John Brinsley, Patrick Harrington
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