Japan's political deadlock deepened on Sunday as ruling and opposition blocs, whose bickering has already left the central bank governor's job empty, clashed over a contentious gasoline tax that expires on March 31.
The stalemate has raised new doubts about Prime Minister Yasuo Fukuda's future, given his difficulties in coping with a divided parliament, even as concerns about Japan's economy grow. It has also stirred speculation about a snap election that the opposition has made no secret of hoping to see this year.
Deputy Bank of Japan Governor Masaaki Shirakawa became acting governor last week after the opposition-controlled upper house of parliament rejected two government nominees for the top post.
Ruling Liberal Democratic Party (LDP) Secretary General Bunmei Ibuki on Sunday urged his main opposition counterpart to hold talks to resolve the BOJ stalemate, which has sparked criticism of both sides at a time when world central banks are working to combat a credit crisis and calm gyrating markets.
Yukio Hatoyama, secretary general of the Democratic Party, appeared to leave the door open for consultations, but stopped short of agreeing to one-on-one talks. "I think it is necessary to improve communication in some form," Hatoyama said in a debate with Ibuki on Fuji TV.
"We will cooperate for that." Hatoyama took a stern stance, however, in the feud over a three-decade-old "temporary" gasoline tax devoted mainly to road construction, rejecting a ruling camp call for talks.
The government wants to extend the provisional gasoline tax when it expires on March 31 to avoid a revenue gap for national and regional budgets for 2008/09.
Democrats and other critics say the tax symbolises the LDP's penchant for wasteful spending on vested interests and want it abolished. The Democrats also argue that other revenues dedicated to building roads should be freed up for other types of spending.
"We cannot accept something that is just a postponement (of a decision)," Hatoyama said, referring to a ruling bloc proposal for compromise.
PM CENSURE MOTION?
Fukuda last week instructed the ruling parties to seek a deal based on a proposal that would ensure enactment of budget-related bills including the gasoline tax by March 31, in time for the start of the new fiscal year the next day.
In return, the government would consider using tax revenues currently dedicated to road construction for general spending as part of future reforms from an unspecified date.
"They are asking that we accept enactment of the budget-related bills before the fiscal year end," Hatoyama said on public broadcaster NHK. "WWe cannot accept this at all. Without a deal, the provisional gasoline tax will expire, resulting in a 25 yen cut in prices many consumers would welcome.
The ruling bloc can revive the tax by using its two-thirds majority in the lower house, but can only do so after the bill has either been rejected by the upper house or 60 days have passed since it was first approved in the lower house on February 29.
Asked if the Democrats would submit a censure motion against Fukuda in the opposition upper house if the ruling bloc revived the tax, Hatoyama told NHK: "That is definitely possible." The censure motion would not be legally binding, but would be a further blow to Fukuda, whose support ratings have already fallen to around 30 percent on doubts about his leadership.
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