Photo/IllutrationPrime Minister Shinzo Abe, center, arrives at a meeting of his Cabinet ministers on June 21, where approval was given to a basic policy on economic and fiscal measures, including the planned October increase in the consumption tax rate. (Takeshi Iwashita)

The Abe administration has decided to go ahead with an unpopular tax increase in October, handing the opposition camp fresh ammunition ahead of the scheduled Upper House election in July.

Prime Minister Shinzo Abe has already twice postponed raising the consumption tax rate and there was speculation he might do it again as lawmakers are loathe to face voters with the prospect of an additional tax burden.

The Abe Cabinet gave its approval on June 21 to a basic policy on economic and fiscal management and reform that clearly stated that the tax rate would be raised from the current 8 percent to 10 percent.

The opposition parties have all come out strongly against the hike, saying economic conditions are not strong enough to sustain an increase.

The Cabinet's decision means the tax hike issue will be front and center during the Upper House election.

In explaining the reason for the tax rate hike, the basic policy, often referred to as the "big-boned policy" on reform, cites the need for stable revenue sources to pay for social security programs and measures to deal with the falling birthrate.

When he hosts the Group of 20 summit meeting in Osaka on June 28-29, Abe is expected to pledge to the international community his intention to go ahead with the tax increase.

The government had already approved various measures totaling about 2 trillion yen ($18.6 billion) to deal with an expected rush in consumer demand before the tax increase takes effect.

Among the measures to be implemented are support for home and car purchases as well as increased public work projects to make up for the anticipated fall in consumption after October.

The basic policy also commits the government to take additional measures in the fiscal 2020 budget if signs emerge that the economy is worsening.

Still, the decision to go ahead with the tax rate hike is a risky one, given strong public opposition to the increase.

A survey in May by The Asahi Shimbun found 54 percent of respondents opposed to the hike, while only 39 percent supported it.

Seventy-five percent of respondents expressed concern that the increase would have a negative effect on the economy.

The opposition parties will seek to capitalize on that public sentiment in the Upper House election.

Yukio Edano, head of the Constitutional Democratic Party of Japan, called for wages of company employees to be raised first, arguing that stable economic growth cannot be achieved without increases in wages and income as well as expanded consumption.

(This article was written by Ryutaro Abe and Hideki Kitami.)