Former Japanese finance minister urges govt to increase consumption tax

20:58, February 22, 2010      

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Former Japanese Finance Minister Kaoru Yosano urged Prime Minister Yukio Hatoyama's administration Monday to increase consumption tax in order to deliver the ruling party's campaign promises.

Yosano, a seasoned lawmaker from the main opposition Liberal Democratic Party (LDP), criticized Hatoyama's Democratic Party of Japan (DPJ) for insisting that he will not raise the tax in his four year term.

"The DPJ administration should shift its stance of policies based on dream to policies based on realities," Yosano told a forum in Tokyo.

Yosano, who was finance minister under the previous LDP-led government, argued that, for example, Hatoyama had vowed that his government will offer the full child-rearing allowance of 26,000 yen per month in fiscal 2011 as pledged in the DPJ's manifesto, but now the government is caught between "rosy promises and harsh realities."

"The DPJ has made many promises, but ignored feasibility," he said.

The DPJ said in its election campaign promises that the government will fund subsidies for young families by cutting wasteful spending, an approach questioned by the opposition LDP.

"We cannot solve Japan's finance problem with a party repeatedly campaigns that we must cut waste, without raising consumption tax," Yosano said.

Japan's new Finance Minister Nanto Kan said earlier this month he plans to embark on serious discussions toward sweeping tax reforms, including a possible increase in the sales tax, as early as in March, once a fiscal 2010 budget clears the Diet, while indicating that the government should seek a public mandate in a general election before any rise in the consumption tax.

Source: Xinhua
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