DPJ panel eyes cut in child benefits amid tattered finances+

TOKYO, May 14 Kyodo -
The ruling Democratic Party of Japan may propose in its manifesto for this
summer's upper house election to reduce monthly child benefits from the amount
it has pledged for fiscal 2011 and beyond, a party panel agreed Friday,
reneging on a key pledge that helped the party to win last year's general
election and achieve a change of government.
Also on Friday, the main opposition Liberal Democratic Party, calling for
greater fiscal responsibility, unveiled a draft of its manifesto for the House
of Councillors election that promises a hike in the consumption tax, albeit
without stating a specific time frame or rate.
In an effort to restore the nation's tattered finances, members of the DPJ
manifesto planning panel also agreed that the party will seek to maintain
Japan's new debt issuance in the initial budget for the next fiscal year below
44.3 trillion yen, the level planned for the current year, DPJ Vice Secretary
General Goshi Hosono said.
The panel's proposals are not final, however, as it has to receive the go-ahead
from another joint panel comprising higher-level members of the party and
government officials, including Prime Minister Yukio Hatoyama, who leads the
DPJ.
It is unlikely that the DPJ will be able to reach a quick conclusion,
especially on the proposal of cutting the monthly child allowances from the
planned 26,000 yen per child, as some DPJ members are cautious about
drastically altering the campaign pledges that the party made for the House of
Representatives election last August.
In its draft manifesto, the LDP states it will carry out ''drastic reform of
the tax system including increasing the consumption tax (from the current 5
percent), while making arduous efforts to promote economic growth strategies
and eliminate wasteful spending.''.
The LDP, which lost power last year for only the second time since its
establishment in 1955, plans to use the entire amount of sales tax revenues to
strengthen the nation's pension, medical and nursing services, which are likely
to balloon amid the graying of society.
The DPJ panel suggested Thursday including a pledge in the manifesto to raise
the consumption tax after the next lower house election, fueling tension
between the DPJ and its two coalition partners -- the Social Democratic Party
and the People's New Party.
SDP chief Mizuho Fukushima said Friday that the party is opposed to raising the
sales tax, demanding that the government come up with other ways to improve the
nation's tattered finances.
Shizuka Kamei, head of the PNP, said he doubts that a tax hike would help to
rejuvenate the economy.
Before last August's election, Hatoyama said a DPJ government would not raise
the consumption tax in its first term and would focus instead on eliminating
wasteful spending of taxpayers' money.
The LDP draft also promises to cut the corporate tax rate to somewhere between
20 percent and 30 percent from the current 40 percent in an effort to encourage
businesses to hire more people and help them ensure their international
competitiveness.
On other issues, the LDP says it will seek to ''restore Japan-U.S. relations of
trust,'' which it apparently claims have been damaged under the DPJ-led
government by a dispute over the relocation of a U.S. Marine base in Okinawa
Prefecture.
But the party fell short of presenting any detailed alternative relocation
plans, with LDP policy chief Shigeru Ishiba saying at a press conference that
the opposition party is not in a position to negotiate with either the United
States or residents on the island.
The party is set to put the draft manifesto on its website to collect public
views before formalizing a final version next month, Ishiba said.
==Kyodo
2010-05-14 23:16:43


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