On March 11, Japan will commemorate the first anniversary of the Tohoku earthquake, tsunami and Fukushima nuclear disaster. As the Japanese remember more than 19,000 lives lost, Japanese politics continues its pattern of instability, aggravated following the 3/11 tragedy.

The government of Prime Minister Yoshihiko Noda has not quite yet reached the depths of unpopularity of his immediate predecessor, Naoto Kan, who resigned last September. Recent opinion polls show approval for Noda’s cabinet trending towards 30%, down from about 60%, when he was first appointed Prime Minister by a vote of the ruling Democratic Party of Japan (DPJ) Diet members. Polls also suggest a continuing long-term public disillusionment with politics: the DPJ currently has only 16% support, with the main opposition Liberal Democratic Party (LDP) faring hardly better on 17%.  At least 54% of respondents claim not to favour any political party. Amid this poor level of public opinion, Noda faces a political crisis, over his proposal to increase the rate of consumption tax, which could force a snap election.

Hiking the consumption tax is advocated by Noda as the best immediate means of addressing Japan’s looming fiscal crisis. Japan’s increasingly aging demographics threaten long-term increases in medical and pension costs, coinciding with shrinking income tax revenues. The cost of the 3/11 disaster (estimated by the World Bank at $US235 billion) has also strained budgets. Local and prefectural governments in the disaster zone still require extensive support for ongoing removal of waste and debris, and repairs to housing, infrastructure, and industry. Temporary housing and social services are still needed for evacuees that remain displaced.

A consumption tax was introduced to Japan in 1997, at a rate of 5%.  Noda’s proposal would raise it to 8% by 2014, then 10% by 2015.  In principle, both major parties agree a hike in the consumption tax is necessary, but Noda’s plan faces hurdles from within and without the DPJ. After coming to power in 2009, the DPJ has had its legislative agenda effectively stymied, since it does not control a majority in the Diet’s upper house, having only 106 seats out of 242, after the separate 2010 election for the House of Councillors. Attempting to break this gridlock, Noda has been negotiating with LDP leader Sadakazu Tanigaki to have the consumption tax increase bills pass with LDP support.

In return, Noda could then potentially dissolve the lower house (the House of Representatives) for an early election, before the end of the current parliamentary session due in June, although the next general election is not due until 2013. Noda maintains he has no plans for a snap election, hoping instead for a successful compromise, not wishing to risk the DPJ’s current lower house majority (including minor party allies) of 320 out of 480 seats. The sticking point is that the LDP wants to have the lower house dissolved for elections before any consumption tax bills are introduced.

Discord within both major parties was heightened by media speculation about a “secret” meeting recently held in a hotel between Noda and Tanigaki, supposedly for negotiations over passing consumption tax bills, and an early election. LDP Upper House members are especially opposed to any compromise with Noda, and want force an election now, to hopefully reclaim what they perceive as the LDP’s rightful place as the “natural” party of government.

Internally, Noda is threatened by the controversial former DPJ leader, Ichiro Ozawa, who still controls the largest single factional bloc of 60-70 DPJ Diet members, despite being under indictment for electoral fraud. Ozawa is threatening to wield his numbers to bring down the Noda cabinet if the attempted increase to the consumption tax goes ahead, as his bloc largely comprises new MPs elected in 2009, due to his patronage. With most on thin electoral margins, they would likely bear the brunt of a voter backlash in a snap election. In addition to this potential split within the DPJ, one of its minor coalition partners, the People’s New Party, also opposes any change to the consumption tax.

Noda acknowledges a consumption tax increase will be regressive and unpopular (with only a 39% approval rate), so potential compensation measures are being floated, such as tax exemptions for essential products and services, to make the changes more politically acceptable. The DPJ executive has already approved reducing the salary of Diet members by 14%, following a decision last week to reduce senior bureaucrats’ salary by 7%(saving ¥580 billion, to be directed to disaster reconstruction), in order to help ameliorate the expected public resentment.

There is plenty of public disillusionment to go around, not least from continuing revelations of the poor handling of the Fukushima Daiichi power plant disaster by its operator TEPCO, and the government.  The slow progress of disaster reconstruction, with insufficient compensation for evacuees from TEPCO, is another lingering source of public disquiet, among other corporate scandals.

The rising political star challenging this malaise is the 42-year-old Mayor of Osaka, Toru Hashimoto. Formerly governor of Osaka prefecture from 2008, and elected mayor of Japan’s second-largest city in December last year, his populist message of radical reform is shaping up as the greatest challenge so far to the DJP/LDP duopoly. Some of his proposals include: direct popular election of the Prime Minister, abolishing the upper House of Councillors, reducing  the number and salaries of Diet members, as well as tackling public waste and corruption in general.  A former TV celebrity “crusading” lawyer (whose late father happened to be a junior yakuza), Hashimoto’s opinion poll approval rates of around 70% easily make him the most popular politician in Japan.

He plans to use this popularity to launch his local Osaka Ishin no Kai (Osaka Restoration Association) Party onto the national stage (although this would surely require a name change — Japan Restoration Association?)  To this end, he recently opened a “political training school”, which was immediately overwhelmed by 2750 applicants. This should readily enable his goal of standing at least 300 candidates, whenever the next national election is, with a stated aim of winning 200 seats.

Even if Hashimoto’s party only wins half that, either of the major parties would need his support to form government. Another possible motivation for Noda and Tanigaki’s ”secret” meeting could have been to discuss forming a “grand coalition” of the DJP and LDP, to outflank such a development. It remains to be seen if Hashimoto’s political ascent turns out to be the catalyst that jolts Japan out of its near-quarter-century of economic stagnation.

Peter Fray

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