Features | Politics | East Asia

Noda’s Bold Tax Plan Play

Japanese Prime Minister Yoshihiko Noda has succeeded in passing a tax and social security plan in the lower house. He now needs to think about the future of his party.

This week, Japanese Prime Minister Yoshihiko Noda succeeded in passing his legislative initiative on consumption tax and social security reform through the lower house of the Diet by a vote of 393 to 96. But it was Noda’s ability to gain the cooperation of his opposition in the Diet that made it possible. Fifty-seven members of his own party decided to thwart his appeal for unity and compromise by voting against the bill (while another 15 abstained).

The engineer of this continued power struggle within the ruling Democratic Party of Japan (DPJ) is none other than Ichiro Ozawa, the former secretary general of the party who has spent almost two years fighting an indictment for mishandling campaign funds. Ozawa was never proven guilty, and after a final court decision on April 26 to that effect, Ozawa returned to political life in the DPJ.

Yet the strength in numbers wasn’t Ozawa’s doing alone. Yukio Hatoyama, the first DPJ prime minister who was forced to resign alongside Ozawa barely nine months after coming into office, joined Ozawa in his campaign against Noda’s leadership. In the weeks leading up to this vote, the DPJ defectors seemed to be less about policy choices and more about factional instincts. Granted, the Ozawa group spokesmen repeatedly argued that the DPJ ought to go back to its electoral manifesto and the principles of reform put forward as their vision of government back in 2009. After three years of governing experience, including presiding over Japan’s historic triple disasters, this seems hardly the time to be referencing a document that has proven impossible for successive DPJ governments to implement.

Rumors abound about the future of the DPJ. Media speculation suggests that Ozawa will leave the party to form yet another new party. If so, this will be his fifth political party affiliation since he walked out of the ruling Liberal Democratic Party (LDP) in 1993 to form the Shinseito (Japan Renewal Party). Ozawa’s catalytic role in the demise of the LDP and in the rise of the DPJ is well known. But his penchant for contrarian politics seems to have yet again gotten the better of him.

The question for the prime minister, of course, is what to do about his party’s defectors. It’s hard to miss the parallel with a similar drama that embroiled the LDP in 2005. Then, their reform-minded prime minister, Junichiro Koizumi, faced a similar dilemma after members of his own party failed to follow his legislative lead. The policy issue at the time was postal reform. Koizumi’s reform bill passed the Lower House of parliament by a narrow margin of victory (233 to 228), but 37 LDP lawmakers voted against the bill and 14 others chose not to vote. A month later, the Upper House defeated Koizumi’s reform bill, and this time the deciding votes were cast by the 22 LDP lawmakers who opposed their prime minster.

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Party discipline is everything in parliamentary politics. Without party unity, legislation can’t be passed, and without legislation, the government can’t govern. Koizumi’s response was to dissolve the Diet and expel the 37 lawmakers who had opposed their party’s legislation. The entire nation was stunned as they watched their prime minister ask them to make a choice about the kind of political leadership they wanted. Risky as it was for the LDP, the point Koizumi made was that the public ought to choose when politicians themselves seem unable to resolve a policy contest.

Noda now has his own tough choice to make about the 57 DPJ members who refused to follow his lead. As the press focuses on Ozawa, and his support from Hatoyama – one of the DPJ’s founding fathers – perhaps the more important question is whether Noda will turn to the Japanese people to decide what kind of politics Japan needs.

Whether because of the internal divisions that seem to handicap the DPJ or the addiction to opposition politics that hamper cross-party compromise, Japan’s citizens have watched in dismay as their politicians have struggled to create a responsible approach to governing. Much of the criticism seems directed at the DPJ, and the antics of Ozawa and Hatoyama this week appear to vindicate the notion that the party is too fraught to govern.

But Noda has set Japan’s government back on track to tackle the serious policy agenda confronting his nation in the wake of last year’s difficulties. He has proven himself able and willing to seek out differences of opinion – from within the bureaucracy as well as across the aisle in Japan’s divided Diet. As political leaders go, Noda is as steady as they come, and he has shown far more fortitude than his DPJ predecessors in addressing his party’s shortcomings.

More importantly, Japan’s prime minister has repeatedly pointed out the obvious. It’s time for Japan’s leaders to think about the nation. Noda must now decide whether this can best be accomplished by returning to Japan’s voters for a new mandate, or by crafting a new legislative majority including non-DPJ politicians who share his desire for decisive government. It’s a tough call.

As currently constituted, the DPJ  isn’t likely to survive. It seems too handicapped by rivalries to effectively govern. The consumption tax won’t be the only issue of contest. In fact, this decision to raise the consumption tax is only the beginning of a long list of decisions ahead for Japan. When he was elected last year, Noda told his party that he was taking “no sides” on his party’s internal differences. Ozawa and his supporters have removed that option.

Noda must now put aside his natural impulse to build consensus within his party and instead begin to define the terms of its future success.

Sheila A. Smith is a senior fellow for Japan studies at the Council on Foreign Relations (CFR), where she directed the New Regional Security Architecture for Asia project and currently leads a project on China and India as Emerging Powers: Challenge or Opportunity for the United States and Japan? She blogs at Asia Unbound, where this piece originally appeared.