Abe set 'to move tax back, poll up'

Abe set 'to move tax back, poll up'

Prime Minister Shinzo Abe plans to meet with Komeito leader Natsuo Yamaguchi as early as Monday to talk about a final decision on the dissolution of the House of Representatives, The Yomiuri Shimbun has learned.

Abe, who is believed to be considering dissolving the lower house as soon as next week, has instructed senior members of the Liberal Democratic Party to speed up preparations for a possible general election, according to sources close to the government and the ruling bloc.

With the situation in mind, the LDP and its junior coalition partner Komeito held a meeting of secretaries general and Diet affairs committee chiefs of both parties on Wednesday morning in Tokyo, where they discussed the handling of the Diet. On the premise that the early dissolution could cause tight Diet schedules, they confirmed that both parties would aim for early passage of important bills.

If the lower house is dissolved next week, there are two possible schedules for the general election - announcing it on Dec. 2 with voting on Dec. 14 at the earliest, or announcing Dec. 9 with voting on Dec. 21.

Abe is considering dissolving the lower house for a general election if he decides allowing the consumption tax rate to rise to 10 per cent next year would not be a favourable move, sources said.

Abe is becoming increasingly hesitant to let the tax rate rise again, thinking it could spark an economic downturn, the sources said.

Yet some ruling party members have been critical of putting off the tax hike. The debate over the issue is expected to intensify when Abe returns from a diplomatic trip on Monday.

'Unstoppable'

When asked in Beijing on Tuesday about a general election, Abe said, "I've never mentioned dissolving [the lower house]."

But according to the sources, Abe has broached the idea with high-ranking Komeito members.

Many in the ruling bloc are said to see the momentum toward a general election as "unstoppable."

The current lower house term lasts until December 2016. That Abe is considering dissolution even before the halfway point shows how hesitant he is to allow another tax hike.

The consumption tax rate increased to 8 per cent in April, its first rise in 17 years.

A series of laws related to social security and taxes enacted in 2012 stipulate increasing the consumption tax rate to 10 per cent in October next year.

Abe is by nature averse to raising taxes and is trying to induce inflation and boost the economy through monetary easing.

According to the sources, he has told people close to him: "No country would double the consumption tax rate in just a year and a half. The law has problems."

Chief Cabinet Secretary Yoshihide Suga, after seeing how large the rise in demand prior to April's tax hike was, reportedly told people close to him, "The situation now is clearly different from that when we raised the rate to 8 per cent."

This and other statements have provided support for Abe's position.

Nobel Prize-winning American economist Paul Krugman visited the Prime Minister's Office for a meeting on Nov. 6.

According to an attendee, Abe listened closely to Krugman's ideas on the risk of raising taxes before ending deflation. The meeting reportedly pushed Abe further toward delaying the tax hike.

Abe could also use overturning the tax hike plan - which was agreed to by the Democratic Party of Japan, the LDP and Komeito - as an opportunity to seek the people's endorsement of his administration.

Election omens good

Victory in an early election would garner Abe a great deal of political capital.

A general election in December means the term of the next crop of representatives lasts until December 2018. Winning would likely smooth the passage of national security legislation next year.

A victory would also make reelection more likely when Abe's tenure as LDP president expires in September, and could pave the way toward constitutional revision.

Even if he stumbles along the way, Abe could seek the people's mandate again, possibly in a dual upper and lower house election in 2016.

"An early election would only be good for the prime minister," a senior LDP member said.

Eisaku Sato is the longest serving postwar prime minister - in office for seven years, eight months, from November 1964 to July 1972.

Abe has studied Sato's tenure and is well aware that he dissolved the lower house twice during his time in office.

Abe has reportedly told people close to him: "The trick to staying in office for a long time is to hold repeated elections over short intervals. But you need to win those elections."

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