Bloomberg News

Noda Sales-Tax Push Confronts Majority Opposition

June 05, 2012

Japanese Prime Minister Yoshihiko Noda

Japanese Prime Minister Yoshihiko Noda. Photographer: Katsumi Kasahara/Pool via Bloomberg

Japanese Prime Minister Yoshihiko Noda’s push to win opposition support for his bill to double the consumption tax is at odds with increasing public sentiment against the legislation.

The number of voters opposed to the tax rose 5 percentage points to 56 percent this month from May, while those in favor fell 7 points to 32 percent, an Asahi newspaper poll today showed. The results are in line with a May 28 Nikkei newspaper poll showing opposition rose three points to 53 percent from the previous month, compared with 38 percent who backed it.

Noda this week reshuffled his Cabinet in a bid to gain support from the main opposition Liberal Democratic Party, which has indicated a deal on the bill is possible. He has vowed to stake his career on raising the tax, in a step toward reining in Japan’s ballooning public debt as welfare costs rise.

“Of course Noda can’t change course at this point,” said Tokyo-based independent political analyst Minoru Morita. “I think his government will plow ahead regardless of public opinion, and so will the LDP.”

Noda needs the support of the LDP to pass the bill in the upper house of parliament, where his Democratic Party of Japan lacks a majority. While the LDP also favors raising the sales tax, its leaders insisted that two Cabinet ministers who were censured by the upper house in April be removed. The ministers were replaced on June 4.

DPJ Secretary-General Azuma Koshiishi yesterday met with his counterparts in the LDP and the smaller Komeito party to discuss the tax legislation without reaching an agreement. The three officials are scheduled to meet again today.

Chief Cabinet Secretary Osamu Fujimura declined to comment on today’s Asahi poll at a daily press briefing in Tokyo.

Economic Factors

The poor state of the economy was probably a factor behind the change in public opinion, Morita said. Japan’s Topix Index (TPX) this week fell to its lowest since 1983 amid concern over the European debt crisis and an economic slowdown in China.

Almost three-fourths of respondents in the Asahi poll said they oppose Noda’s aim of passing the bill during the current Diet session, compared with 17 percent in favor. The session ends on June 21, but can be extended. Noda’s approval rating rose by one percentage point to 27 percent, while his disapproval rating was at 51 percent. The survey received 1,063 valid responses and provided no margin of error.

“It’s easy to say things that will make you popular,” Foreign Minister Koichiro Gemba told Keidanren, Japan’s biggest business lobby yesterday after Noda reiterated his determination to pass the bill. “Real politics is about doing unpopular things if they are necessary.”

To contact the reporters on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net; Stuart Biggs in Tokyo at sbiggs3@bloomberg.net

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


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