Japan lawmakers to approve long-awaited tax hike

An unpopular bill to double Japan's sales tax and partially plug its gaping debt hole is set to be passed by lawmakers Friday in a triumph for the prime minister that could also herald the end of his job.

The legislation, which will at the same time revamp the country's teetering social security system, has been the main focus of Yoshihiko Noda's 11-month premiership.

Its expected passage will be a rare tangible achievement in the revolving door world of Japanese leaders that has seen six new men step into the role in as many years.

Without a majority in the upper house, Noda is having to rely on his conservative opponents, who have demanded the premier call a general election in exchange for their support.

Observers say Noda's riven Democratic Party of Japan (DPJ) are likely to suffer at the hands of voters disappointed by their lacklustre three years in office and may punish him in September's party leadership election.

Noda's Finance Minister Jun Azumi Friday heralded the expected vote.

"There have been various twists and turns, but now we can vote today in the upper house," he told reporters, according to the website of the Nikkei.

"It is an historic achievement. It will be a first big step towards fiscal structural reforms.

"Fiscal reconstruction is particularly necessary for Japan," said Azumi, a reference to its debt level, which stands at an industrial-world high of around twice its GDP.

"At a time when the global economy is unstable, Japan's firm handling of fiscal reconstruction will get rid of one risk and lead to stability globally."

International bodies, Japanese newspapers and the bulk of domestic commentators agree that raising consumption tax in stages to 10 percent is a good idea.

But only around half of the electorate approves of the plan, polls show, with populist politicians capitalising on the unwillingness of people to pay more tax in an economy that has been treading water for years.

Noda on Thursday rode out a bid by a collection of minor parties -- including former rebels from the DPJ -- to pass a motion of no-confidence in him after the Liberal Democratic Party (LDP) agreed not to support the move.

But the vague pledge he would hold elections "in the near future" has irked his own lawmakers, many of whom are likely to lose their seats the next time the electorate is asked for an opinion.

"A movement to oust Noda from the premier's post may begin and his re-election in the party presidential vote in September is now doubtful," said Tetsuro Kato, professor of politics at Hitotsubashi University.

"Sure, the tax hike is an important issue in the context of the global environment where Europe is suffering from a sovereign debt crisis, and so Noda would earn his name in history.

"But with a political crisis just postponed after the agreement with the opposition, Noda's government is destined to be as short-lived as his predecessors' were," Kato said.

Source: http://news.yahoo.com/japan-lawmakers-approve-long-awaited-tax-hike-065523937.html

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