|Date: 10/08/2012 Time: 06:26:00 PM
Japan's parliament enacted government-proposed
sales tax and social security reform bills on Friday, paving the way for the
country to reduce its swelling public debt.
The controversial bills cleared the opposition-controlled Upper House by
188 to 49 votes with the backing of Prime Minister Yoshihiko Noda's Democratic
Party of Japan (DPJ) and the two largest opposition parties -- the Liberal
Democratic Party (LDP) and the New Komeito.
The Lower House already passed the legislation in June, which will double
the consumption tax to 10 percent in two stages by October 2015. It is the
first consumption tax hike since 1997, when the rate was raised from 3 percent
to the current 5 percent.
The enactment marks a breakthrough for Noda, who has vowed to stake his
political career on passing the tax hike bill. "It is important to ensure
stable financial sources for social security," Noda told a televised press
conference following the vote. "I want the people to understand that someone
must bear the burden for this growing cost," the premier said.
In exchange for securing their support, Noda has promised the leaders of
the LDP and New Komeito that he will dissolve the more powerful Lower House
and call elections "sometime soon" after the bills are passed.
The LDP is demanding a dissolution before the current parliament session
ends on Sept. 8. But at the press conference, Noda refused to specify date for
Noda has repeatedly said it is essential to raise the sales tax to cope
with the country's increasing social welfare costs and state debt. Japan's
public debt exceeds 200 percent of annual gross domestic product (GDP), the
highest ratio in the industrialized countries.