This article is from the source 'guardian' and was first published or seen
on .
It last changed over 40 days ago and won't be checked again for changes.
Japan PM axes ministers and stakes reputation on tax reforms to cut debt
Japan PM axes ministers and stakes reputation on tax reforms to cut debt
(40 minutes later)
Japan's prime minister, Yoshihiko Noda, has replaced several ministers in an attempt to win opposition support for unpopular tax rises that could yet sink his administration.
Japan's prime minister, Yoshihiko Noda, has replaced five cabinet ministers in an attempt to win opposition support for unpopular tax rises that could yet sink his administration. Noda, who assumed office last September, says the tax reforms are needed to address soaring welfare costs and huge public debt. The most controversial is a two-stage doubling of the consumption (sales) tax to 10% over the next three years. Japan's public debt is more than 200% of GDP and last month the ratings agency Fitch cut its sovereign credit rating, citing social security costs.
Noda, who assumed office last September, hopes the reshuffle will win him support in Japan's divided parliament for tax reforms that he says are needed to address soaring welfare costs and huge public debt.
The most controversial is a two-stage doubling of the consumption (sales) tax to 10% over the next three years, with the first increase, to 8%, coming in April 2014.
Japan's public debt is more than 200% of GDP; last month the ratings agency Fitch cut its sovereign credit rating, citing its lack of progress in dealing with rising social security costs.
The sacking of five cabinet ministers is Noda's latest attempt to ward off opposition threats to block the tax reforms and force an early general election.
His Democratic party of Japan [DPJ] is at the mercy of opposition parties, led by the Liberal Democratic party [LDP] in the upper house. In the more powerful lower house, too, Noda faces a revolt among more than 100 MPs from his own party who are loyal to Ichiro Ozawa, an influential power broker with whom the prime minister has clashed over tax reform.
Ozawa, who was recently cleared of illegal fundraising, has said he will vote against the tax bills.
The LDP supports the tax rise in principle, however, and indicated it was willing to compromise if Noda ditched "incompetent" ministers and dropped reforms that could lead to more public spending.
"This reshuffle is to strengthen the cabinet and ensure that the government can make progress on several different policies, including tax and welfare reform," Noda said. "I cannot allow this bill to be defeated.
"Japan's future depends on what we do from here. To show that the parliament can reach agreements and make decisions, I'm asking for talks among the political parties."
The reshuffle victims included the transport minister, Takeshi Maeda, and the defence minister, Naoki Tanaka, who has faced accusations of incompetence since his appointment in Noda's first cabinet reshuffle in January.
Tanaka has been replaced by Satoshi Morimoto, a conservative academic who has worked for the foreign ministry and served in the air force. He is Japan's first foreign minister from outside politics since the end of the second world war.
Noda, Japan's sixth leader in five years, has staked his political career on passing the tax reforms during the current parliamentary session, which ends on 21 June. There is speculation, though, that he may try to extend the session.
