EDITORIAL: Revote on gasoline tax

After a month of reveling in cheaper fill-ups at the pump, consumers are now seeing gasoline prices surging back to previous levels following Wednesday's passage of the bill reviving the unpopular surcharges. Combined with the further climb of crude oil prices in recent weeks, the tax hike of 25 yen per liter is expected to raise the average gasoline price above 160 yen per liter from around 130 yen.

The ruling coalition has enacted the bill to restore the gasoline and other vehicle-related tax surcharges that expired at the end of March in a revote in the Lower House to override Upper House opposition.

Prime Minister Yasuo Fukuda sought public support for the step, saying it is necessary to stop a daily loss of 6 billion yen in tax revenue due to the expiration of the surcharges. But it is hard to accede to his entreaty.

Such a big hole in central and local government tax revenues is indeed a serious problem. But the Diet deliberations on the taxes earmarked for road construction laid bare fundamental problems with the way the money has been spent.

To win taxpayer support for reinstating the levies that were once removed, the government should have presented concrete plans to eliminate wasteful expenditures, dry up this noxious sump in special-interest politics and slash the bloated road budget.

Fukuda talked about measures to fix the problems, including reform of the bidding system for public works contracts. But they are clearly not up to the scale of the challenge. Fukuda's remarks concerning the surcharges left the impression that he is trying desperately to keep them in place, if only for this fiscal year.

The ruling coalition intends to use its two-thirds majority in the Lower House again in mid-May to ram through the Diet a separate bill to maintain the earmarking of road tax receipts only for road-related projects for 10 more years. After weeks of bitter debate and political storm over road funding, the current Diet session, held under the control of both houses by different camps, is ending up turning into a sad spectacle of brass-knuckle politics driven by force of numbers.

Seeing the ardent zeal with which Fukuda and his Liberal Democratic Party have been trying to protect the gasoline tax surcharges has reinforced our conviction that the road budget is sacrosanct after all.

The leading crusaders for the protection of this fiscal sanctuary are a group of LDP lawmakers known as the "road tribe." Their efforts are supported by the construction industry, local government chiefs and members of prefectural and municipal assemblies. Road spending has been the lifeblood of "Japan the construction state," with the construction industry fed at the trough of public works constituting a large sector of the economy.

It is undeniable that road projects do not just make life more convenient for residents but also prop up local economies through huge public investment.

Given the shrinking and aging of the population and the deteriorating fiscal health of the nation, however, walling off road funding is no longer acceptable. It is now inevitable to shift the earmarked tax receipts into the general revenue account. Fukuda made a gutsy decision when he pledged to put the money into the general revenue pot, starting in fiscal 2009.

It is simply inconsistent with the prime minister's promise for the ruling camp to enact the bill to maintain the road-financing system by passing it through the Lower House a second time by a two-thirds majority. Fukuda should abandon this legislation altogether to demonstrate a firm commitment to his vow.

The ruling alliance can steamroll the bill through the Diet despite the rejection by the Upper House thanks to the overwhelming majority it gained in the Lower House through the 2005 election, which was called by then Prime Minister Junichiro Koizumi to achieve his policy ambition to privatize postal services.

Back then, however, Koizumi was talking about making road funds available for any program. Now, the votes cast for Koizumi's government then are going to be used for a measure that contravenes his platform. Many voters must be feeling unhappy about this prospect.

The Fukuda Cabinet was created only through a leadership change in the LDP. The administration has yet to win a clear popular mandate through a national election.

The government's failure to make a convincing case for enacting the controversial bill through revote has highlighted its lack of political legitimacy.

--The Asahi Shimbun, May 1(IHT/Asahi: May 2,2008)