Japan’s ruling party suffers mass defection
Move led by veteran Ichiro Ozawa could consolidate prime minister’s hold on power after months of infighting
guardian.co.uk, Monday 2 July 2012 11.52 BST
Japanese political heavyweight Ichiro Ozawa, one of the key figures behind the ruling party’s rise to power, led a defection of dozens of politicians on Monday. However, the government will retain its majority in the powerful lower house of parliament.
Indeed, the departure of Ozawa, 70, and his followers could help the prime minister, Yoshihiko Noda, to consolidate control on his fractious party and cut deals with the opposition, whose help he needs to pass laws since they control the upper house, which can block bills.
“I’m sure Noda has the champagne on ice. He’ll be happy to see the back of Ozawa,” said Jeffrey Kingston, director of Asia studies at Temple University’s Japan campus.
“Ozawa has a lot of baggage and has just been a headache for the party and Noda in particular.”
Ozawa, known as the “Shadow Shogun” for his backroom deals, quit with his followers over a plan to double sales tax to 10% in three years.
The proposal, aimed at curbing rising public debt, was passed by parliament’s lower house last week with the help of the opposition. But 57 lawmakers in Noda’s Democratic party of Japan (DPJ) voted against, with 15 others abstaining or absent.
Forty lower house members and 12 in the upper chamber – many of them rookies – will resign from the DPJ, an aide told reporters. That would cut the ruling party’s numbers in the 480-member lower house to 249 from 289.
However, Kyodo news agency said later the number had been revised to 50 in total after two lower house MPs said they would not leave the party.
Ozawa, whose smaller party merged with the then-opposition Democrats in 2003, has argued the planned tax increase violates campaign pledges.
Many people are also wary of raising the tax at a time when Japan’s recovery from last year’s tsunami and nuclear crisis is not yet assured.
But Noda, a former finance minister, has insisted it is vital to get Japan’s fiscal house in order and find ways to fund the bulging social welfare costs of a fast-ageing population.
“Noda said he risked his political career to raise the sales tax hike, so he did. His message was that he didn’t really care about the party more than he cared about raising the sales tax,” said Koichi Haji, chief economist at NLI Research Institute.
“I think the [main opposition] Liberal Democratic party (LDP) will co-operate in passing through the sales tax hike bills and other budget-related bills through parliament,” he added. “This is a positive step forward.”
Japan has suffered a string of credit downgrades in the past two years, largely because of its failure tackle its debt, already twice its annual economic output and the worst among advanced industrialised countries.
So the tax plan’s approval in the lower house marks a milestone for a nation long trapped in a cycle of revolving-door governments and policy gridlock.
Ozawa’s defection could well make it easier for Noda to co-operate with the LDP and its one-time partner, the New Komeito party, in getting the legislation through the upper house.
“We can keep the main scenario that tax and social security reform bills will be cleared at the upper house as well,” said Kyohei Morita, chief economist at Barclays Securities Japan.
Ozawa, a strategist and master of backroom deals during his four-decade political career, has long been a paradox.
Fans have seen him as a reformer for advocating a bigger global role for Japan and the reduction of bureaucrats’ control over policies, while critics paint him as an old-style schemer.
Ozawa was a rising star in the LDP before he left in 1993, setting off a chain reaction that briefly ousted the conservative party. He then devoted the next two decades to creating a viable alternative.
But he has suffered setbacks in recent years, including being forced to resign as DPJ leader over a funding scandal before its historic victory in 2009, a win some credited him with orchestrating. He then lost a party leadership race in 2010 and last year, his favoured candidate was defeated by Noda.
Many analysts believe his influence is waning, one reason being a generational shift in political circles and voter distaste for the old-style politics he came to symbolise.
“Ozawa knows what people want to hear … [but] it’s a popular message by an unpopular man,” Kingston said.