Aso ditches reform pushed by Koizumi

2009/1/29

BY NAOTO INAGAKI, THE ASAHI SHIMBUN

Prime Minister Taro Aso made a decisive break with the cost-cutting structural reform program of Junichiro Koizumi in a policy speech before the Diet on Wednesday that was notable for its less confrontational tone.

The embattled leader said his government would spend more lavishly to protect ordinary residents, small businesses and regional areas from the global economic crisis. He also vowed to use a fund of 400 billion yen to create 1.6 million jobs over a three-year period.

The declaration effectively ends eight years of tough cost-cutting and deregulation ushered in by Koizumi and continued by his successors in the Liberal Democratic Party.

But the spending would inevitably come at a cost, Aso said, referring to his determination to raise the consumption tax rate. "In order to implement massive government spending, there is a need to clarify our responsibility toward the fiscal condition," he said.

Last September, in a speech delivered shortly after he took office, Aso went on the attack against opposition Minshuto (Democratic Party of Japan) with a relentless succession of questions about its policy positions and attitude to Diet deliberations.

In that address, Aso used the word "Minshuto" 12 times. In his speech Wednesday he did not mention the party once, focusing instead on his own party's plans as it prepares for a Lower House election that must be held by September.

"What contributions should we make in creating a new world?" Aso asked. "What do we have to do to create a new Japan? I want to talk about what my plans are."

These included the ruling party's economic stimulus package, a feature of which is a 2 trillion yen cash handout to households that has been widely criticized as an ineffective and populist stunt. Social security, agricultural policy, education and the environment were also areas of concern, he said.

Aso's aggressive posturing last September was considered a pre-emptive move in the face of expectations he would quickly dissolve the Lower House and call a snap election. But abject approval ratings for the Aso Cabinet in recent months have forced him to postpone the plan and soften his tone.

Amid the growing public skepticism and further predictions of economic gloom, Aso chose to focus on the importance of economic recovery and emphasized his readiness to leave behind the reformist fiscal policies of Koizumi. The former prime minister, who built his leadership largely on the notion that smaller government was better for Japan, introduced stringent budget caps that limited spending on public works and social welfare.

"Slogans such as 'from the public sector to the private sector' and questions such as 'a big government or a small government' will not allow us to come up with the appropriate plan" to handle the economic crisis, Aso said.

Economic recovery was critical, Aso said, but so too was a comprehensive overhaul of the tax system, for which legislation would be introduced by fiscal 2011.

A recent decision by the ruling Liberal Democratic Party to take an ambiguous position on the timeframe for a consumption tax hike prevented Aso from giving more detail about a start date.

At just 8,400 characters, Aso's speech was the shortest policy declaration to the Diet since then Prime Minister Zenko Suzuki's speech in 1982, which ran for 7,393 characters.

Aides to Aso said the original draft was only about half the eventual length and that Aso had wanted to keep the speech brief to deliver his message as simply and clearly as possible.(IHT/Asahi: January 29, 2009)