We protest against government-ruling party’s plan to raise the consumption tax without seeking public verdict via election

Statement by ODAGAWA Yoshikazu
National Confederation of Trade Unions (Zenroren) Secretary General

(1) The government-ruling party task force on social security reform held a meeting today (January 6) to approve a draft tax reform plan focusing on raising the consumption tax rate in stages, from the current 5 percent to 8 percent in April 2014 and to 10 percent in October 2015 and a draft plan for social security reform that would force the people to shoulder due financial burdens to meet the cost for services. Prime Minister NODA Yoshihiko wants to discuss these drafts with opposition parties and then submit a bill in the Diet.

The Democratic Party Japan (DPJ) in the 2009 House of Representatives general election promised that there would be no consumption tax increase for the next four years. The election led the DPJ to take power. But in the 2010 House of Councilors election the DPJ called for the consumption tax to be raised to 10 percent and lost many seats. Clearly, the government-ruling party’s plan to raise the consumption tax without seeking public verdict via election on the pretext of the need to secure revenue for social services reneges on its promise.

Zenroren protests against the government-ruling party’s undemocratic procedure as well as the content of the tax increase plan. It will do all it can to stop the so-called combined social security and tax reforms that includes a consumption tax increase.

(2) The government-ruling party plan contains a number of provisions that are so serious that we cannot overlook.

First, it defines social services as people’s mutual aid programs and emphasizes the need to balance burdens and payments, the logic of insurance. This concept lacks the idea provided by the Constitution that “All people shall have the right to maintain the minimum standards of wholesome and cultured living”, which should be the basis of social services.

Secondly, the plan unilaterally asks the people to pay more in consumption tax without improving social programs, such as the pension system, the health insurance, and nursing care for the elderly.

Thirdly, the government-ruling party plan says that the purpose of the consumption tax was defined in 1998 as the source of revenue to fund welfare services, including pensions and that, with aging population further increasing, revenue shortfalls will make it difficult to maintain the social services if the consumption tax rate continues to be 5 percent. Making the consumption tax revenue the source of social welfare services could force the people to choose between a consumption tax increase and cutbacks on social security benefits. By contrast, military expenditure will be exempt from cutbacks.

Fourthly, the plan says that corporate tax rates will continue to be a subject of discussion. It ignores the reality that social services will not be maintained without asking large corporations, which amass a total of 2.56 trillion yen in internal reserves and which have high taxpaying capacity, to pay more in tax.

(4) The fact that Japan’s social services system is inadequate has been proved by hardships many people have experienced since they lost their jobs immediately after the collapse of Lehman Brothers and by the state of victims of the March 11 (2011) earthquake and tsunami that hit northeastern Japan as well as the situation in disaster-hit areas.

The task now is for the government and political parties to discuss ways to improve and expand social services to prevent income inequality and poverty from increasing and to strengthen the wealth redistribution systems. Such discussions should take up as the main political agenda the need to ask the wealth and large corporations to pay more in taxes according to their ability to pay and focus on building a society that will increase quality jobs and adequate social services.

Zenroren demands that the Diet discuss measures that the public needs most instead of leaving the government-ruling party plan to consultations between political parties.