CDP divisions over proposed tax cut pose headache for Yoshihiko Noda

Japan Times

17-04-2025

The question of whether to lower the consumption tax on food items to help consumers hit hard by rising prices has led to public spats within the Constitutional Democratic Party of Japan, and concern it might break up over the issue.
The arguments come as the nation's largest opposition party prepares for the Upper House poll in July, in which it hopes to win enough seats to make a CDP-led coalition government possible. The opposition parties collectively hold a majority in the Lower House, but the Liberal Democratic Party and Komeito control the upper chamber.
The consumption tax question is threatening to divide the CDP, with sharp words exchanged between members pushing for a temporary reduction in the consumption tax on food products, from 8% currently to zero percent, and others who see such a move as a political gimmick that will only add to the national debt.
In response to the April 1 price hikes on more than 4,000 food items, a study group headed by the CDP's former acting representative Kenji Eda called Tuesday for the consumption tax on these items to be eliminated.
'Protecting people from rising prices should be positioned as one of the most urgent and important issues in the current national agenda. Reducing the consumption tax on food from 8% to zero percent for the foreseeable future, while prices continue to rise, is the most effective measure and one that people desire,' a proposal from a party study headed by Eda says.
However, the idea of reducing the tax to zero percent is strongly opposed by another former CDP leader, who says that it would involve adding to government debt that would simply be passed on to the next generation.
'You can't say irresponsible things in an irresponsible manner. If you want to push tax reduction populism, then please go and form another political party,' Yukio Edano said during an April 12 speech.
Edano's words drew a sharp rebuke from party veteran Ichiro Ozawa, who called them rude and arrogant, while Eda expressed regret, saying attempts to squash freedom of speech can't be ignored.
The squabble led many to wonder whether the CDP's internal divisions were serious enough to present the risk of a formal split — a possibility CDP President Yoshihiko Noda addressed Sunday.
CDP head Yoshihiko Noda speaks in the city of Sagamihara, Kanagawa Prefecture, on Sunday. |
JIJI
'Splitting the party up is not something I want to do at all,' Noda said, adding that the various party views would be taken into consideration.
For Noda and the CDP, consumption tax issues are extremely sensitive because he was prime minister in August 2012 when his government decided to raise the consumption tax, passing legislation to raise it to 8% in 2014 and then to 10% in 2015. The raise to 10% was twice delayed and didn't happen until 2019.
The rise divided members of Noda's party, one of the predecessors of the current CDP. Ozawa, who had been among them, bolted at the time with about 50 of his allies. The Noda administration ended in December 2012 when the LDP won the Lower House election and returned to power. The CDP in its current form came into being in 2017.
Today, the CDP does not have legally recognized political factions, but it does have informal groups centered around Noda, Ozawa, Edano, Eda and a few others. As of November, Edano's group had about 30 members, while Eda's had roughly 20, Noda's group had about 15, and Ozawa's group had about 10.
Masato Kamikubo, a political scientist at Ritsumeikan University, says that, currently, a formal split over the consumption tax issue before the Upper House election in July is unlikely because no one in the CDP would benefit.
However, he notes that public support for tax reductions is growing, to the point where demonstrations against the Finance Ministry are taking place.
'Even maintaining the current consumption tax rate could cause the CDP to lose support and struggle for votes in the Upper House election. So Noda may be forced to make difficult decisions in the days ahead,' Kamikubo says.