Koizumi's 'structural reform' policy revives under Kan

Japan Press Weekly

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Koizumi's 'structural reform' policy revives under Kan

- Akahata 'clear stream, muddy stream' column

Imposing heavier burdens on the general public is openly called for by Prime Minister Kan Naoto, who used to criticize the "structural reform" policies promoted by the Koizumi Cabinet under the former Liberal Democratic-Komei coalition government.

The DPJ fought the House of Representatives election last August with the slogan of "politics for the people's living conditions" and claimed that it would improve the following public services in order to boost domestic demand: childcare, education, pension, and medical care.

However, in the DPJ's latest manifesto for the House of Councilors election, the main slogan calls for a "strong economy." Compared with the last election platform, its list of policy priorities lowered the rank of "childcare and education" from second to forth, "pension and medical care" from the third to fifth, and "employment" from the fifth to sixth.

On the contrary, "foreign affairs and security" moved up from seventh position to third on the list, showing the DPJ's favorable stance to the U.S. government. The top of this year's list is the "eradication of the wasteful use of tax money", the same as last year. The purpose of the proposal, however, is "fiscal recovery" by increasing the consumption tax rate while last year it was to "secure budgets for measures to improve people's living conditions".

In order to build a "strong economy", the ruling party proposes promotion of deregulation, corporate tax cuts, and imposition of an inflation target. These are almost identical to the Koizumi Cabinet's "structural reform" policies. The only thing that is different is that reduction in corporate taxes has been added by the Kan Cabinet. Although Prime Minister Kan Naoto explains that the revenue from the consumption tax rate hike will be used for social services, this explanation is not on the DPJ's manifesto. His true intention is to use the revenue as a means to further lower corporate tax obligations.

The Kan Cabinet is following in the footsteps of the Koizumi Cabinet by representing the interests of major corporations and the U.S. government while forcing the public to shoulder heavier burdens. However, relying on foreign demand for Japan's exports is no longer effective at a time when major countries are launching austerity measures. Levying more taxes on the public will further contract the Japanese economy, making it more difficult to achieve fiscal restoration.

- Akahata, July 8, 2010