Tokyo Notes

Through Kan’s Fingers

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Tokyo Notes

Through Kan’s Fingers

Now, the question looms even larger. Was Kan the right choice to replace Hatoyama?

Prime Minister Naoto Kan was supposed to be a safe pair of hands. After he was selected to replace Yukio Hatoyama last month, many in Kan’s Democratic Party of Japan must have thought they had chosen the right man, espcially when opinion polls showed support for the cabinet had shot up to 62 percent (from a low of 19 percent under Hatoyama). But Sunday’s election defeat in which the DPJ lost control of the upper house shows that such high hopes were premature.

After months of dithering over the issue of the Futenma air base location, backtracking on election pledges, policy incoherence and lingering money and politics scandals, the DPJ needed a new, clean leader who would steady the DPJ ship and steer it away from stormy waters.

Kan seemed to fit the bill perfectly. He had not been vocal on the Futenma issue, he enjoyed a positive reputation among the public, a wealth of experience as a former leader of the party and had a grassroots background in politics. This was not a reinvented ex-Liberal Democratic Party member or a Japanese political blueblood like Hatoyama. He also quickly moved to lessen the influence within the party of political heavyweight Ichiro Ozawa, whose grouping within the DPJ is the party’s largest, but whose funding scandals and interference in policymaking were targets of criticism.

But Kan’s determination to quickly redirect the national debate away from the DPJ’s woes and the Futenma issue toward the government’s finances and the sales tax proved to be too much of a risk to take immediately before an election.

Talk of raising the sales tax had long been a pre-election taboo in Japan. Let’s face it, raising taxes is not popular anywhere. But Kan judged that the Greek debt crisis would have had sufficient impact on the nation for voters to consider the issue with more perspective. To a certain extent he was right, since the party that won Sunday’s contest for half the seats in the upper house is advocating a hike to ten percent in the sales tax to help square the nation’s books. Unfortunately for Kan, that party is the LDP.

The problem was that with the DPJ having difficulty fulfilling its manifesto promises from last year’s election, Kan’s talk of raising the sales tax came as a bolt out of the blue. He then failed to reassure the public that any raise would not come until after the next general election (in line with Hatoyama’s policy on the matter) and offered conflicting explanations as to what the extra tax money would be used for and how the extra tax burden on low-income households would be relieved. How could spending on social security be increased if extra revenue was to be earmarked for narrowing the budget deficit? How could economic growth be expected in the immediate aftermath of a tax increase? How much extra would the sales tax have to be raised to make up for the loss of revenue implied by helping low-income households?

Suddenly it was easier to cast an image of Kan as just another DPJ leader trying to slide away from previous manifesto commitments and speaking before ideas were clear in his head or agreed to by his cabinet or even discussed by his party. Perhaps there was even the perception that Kan had turned native during his time at the Finance Ministry adopting the views on fiscal consolidation of the very bureaucrats whose influence the DPJ is trying to diminish.

Still, given that Kan has only had a month in office, the election result should be seen more as a judgment on the DPJ’s ten months in power rather than Kan’s leadership. While it looked as if Kan was capable of turning the party’s fortunes round in an instant, the reality was that voter dissatisfaction ran far deeper than that.

Having failed to complete his rescue mission, Kan will now have to perform in an unfavorable political environment in which he has no upper house majority to secure the passage of DPJ bills. He will also have more difficulty in keeping the Ozawa contingent of the party ‘quiet.’ Ozawa has already been huffing and puffing about Kan’s leadership, the sales tax issue and broken manifesto promises. If he can make a favorable impression under these circumstances his fortunes could change.

But with a DPJ leadership election looming in September, Kan now knows the timescale in which he has to show his party that he was indeed the right man to replace Hatoyama.