Minshuto to make Diet a battlefield over gas tax

In an attempt to force a Lower House election, opposition Minshuto (Democratic Party of Japan) will make gasoline prices the main issue in the ordinary Diet session scheduled to begin today.

"Now, when price hikes in gasoline and kerosene are directly affecting people's lives, we will work in the Diet to abolish the temporary tax rate for the gasoline tax and show the results to the public," party leader Ichiro Ozawa said at Minshuto's annual convention Wednesday in Yokohama. "We have to accomplish a price decrease of 25 yen (per liter)."

Minshuto officials hope their strategy will eventually force Prime Minister Yasuo Fukuda to dissolve the Lower House and call a snap election.

Unless taxation-related bills are passed before the end of March, the current temporary higher tax rates, which have been in place for decades, will expire.

Ruling coalition officials plan to counter Minshuto's offensive by arguing that the tax cut would cause a sudden revenue shortfall for local governments, which would then be unable to provide services to residents.

Liberal Democratic Party officials were reminded at their own party convention that allowing Minshuto to take the initiative on the gasoline tax issue would not be politically wise. At a Wednesday meeting of secretaries-general of prefectural chapters held prior to the LDP convention, voices were raised about strategy in the Diet.

"The party must make greater efforts to explain why an extension of the temporary gasoline tax rate would be good for life in the local regions," a representative from the Wakayama chapter said. "We have fallen behind Minshuto."

Minshuto's strategy is to stall Lower House deliberations on legislation covering the temporary tax rate until early March. If that is accomplished, the opposition-controlled Upper House could defeat the legislation and have the temporary tax rates expire at the end of that month.

The ruling coalition could still bring the legislation back to the Lower House for a second vote and pass it into law with a two-thirds majority.

In that event, Minshuto would likely submit a censure motion in the Upper House against Fukuda and press the prime minister to dissolve the Lower House and call a snap election.

Fukuda has repeatedly said he has no plans to call a snap election in the near future.

LDP lawmakers have been given documents showing how much local governments would fall short of budgetary revenue targets should the temporary tax rate expire.

Prefectural assembly members belonging to the LDP plan to hold a national meeting Jan. 23 supporting legislation that would extend the temporary tax rate. All revenues from the temporary tax are used for road-related projects.

One prefectural assembly member said: "Minshuto Diet members always attend ceremonies at new road openings. That would be a perfect time to question them about their opposition to the extension."

Prefectural chapter representatives raised concerns during the Minshuto party convention. The Aomori representative said: "Mayors are now saying 'Now is the time to attack Minshuto' because we will not be able to pave roads or provide snow removal equipment. Party leaders should make thorough explanations."

While an expiration of the temporary gasoline tax rate could lead to a 25-yen decrease in the price for a liter of gas, the amount of tax revenues lost would also be huge.

The six gasoline and other road-related taxes generate 3.3 trillion yen in annual revenue for the central government and 2.1 trillion yen for local governments.

The temporary tax rates on five of those taxes are set to expire either at the end of March or April. If all five tax rates expire, the central government would lose 1.7 trillion yen in revenues over a year while local governments would lose 900 billion yen.(IHT/Asahi: January 18,2008)