Opposition demands Abe’s resignation over possible tax hike deferral
Opposition parties yesterday called for Prime Minister Shinzo Abe to resign should he break his promise to implement the 2 per cent consumption tax increase as planned in April 2017.
Main opposition Democratic Party acting Secretary General Tetsuro Fukuyama said during a NHK television programme that Abe and his cabinet should resign if he does not fulfil his pledge, and pushes the tax increase back to October 2019. Officials from the Japanese Communist Party and the Social Democratic Party backed Fukuyama’s demand.
During the same NHK programme, Liberal Democratic Party acting Secretary General Yasufumi Tanahashi asked for public understanding over the likely decision to postpone.
“It is a matter of course that [Abe] will deal with the situation flexibly under the circumstances that tax revenues are unlikely to increase in the mid and long-terms,” Tanahashi said.
Tetsuo Saito, acting secretary general of the Liberal Democratic Party’s (LDP) coalition ally Komeito, said that his party has been left out of discussions and that he has heard “nothing” about the postponement. He said he will decide on a response after discussions with the LDP.
It has been reported that Abe told government aides and the LDP on Friday evening of his plan to push the timing of the rise back by two-and-a-half years.
It is a matter of course that [Abe] will deal with the situation flexibly under the circumstances that tax revenues are unlikely to increase in the mid and long-terms
The plan to shelve the tax hike comes as the Japanese economy is experiencing sluggish growth due to tepid domestic private consumption and a slowdown in emerging economies, especially China. Consumer spending in Japan has plunged following the previous consumption tax increase in April 2014.
Abe said at a Friday press conference following the Group of Seven summit meeting in central Japan that he would make a decision on whether to postpone the increase before a House of Councillors election to be held in July, stressing the current risks in the global economy.
If it transpires, it will be the second time that Abe has decided to delay a consumption tax hike. Following an increase of three percentage points to 8 per cent implemented in April 2014, the second tax increase to 10 per cent was originally planned for October 2015, but Abe announced a deferment in November 2014.
Since that first postponement, Abe has repeatedly said he would go ahead with the tax increase in April 2017 unless there was a major global economic shock or another earthquake equivalent to the one that devastated northeastern Japan in March 2011.
A two-stage tax increase schedule was originally laid out in a 2012 accord between the LDP, Komeito and the now-defunct Democratic Party of Japan, which is currently the DP.
Abe brought up the postponement proposal Friday evening during talks with Finance Minister Taro Aso, Chief Cabinet Secretary Yoshihide Suga and LDP Secretary General Sadakazu Tanigaki. The four men failed to reach an agreement and decided to continue further discussions, according to source close to the matter.
Aso and Tanigaki told Abe that he would need to call a general election of the House of Representatives at the same time of the July upper house election if he postpones the hike, the sources said.
Abe, however, did not make clear whether he supports the idea, they said.
