Prime Minister Sanae Takaichi's signature consumption tax cut bill entered the Upper House on Wednesday, a chamber where the opposition holds the majority and where she must win over parties she does not command, Nikkan Sports reported.
Takaichi answered questions in the plenary session. With her minority government unable to count on the bill's passage, she said she would not rule out discussion of constructive proposals from opposition parties.
She promised to explain the bill's content, its underlying thinking and the data carefully. "I will listen carefully to the views of each party," she said, taking a conciliatory tone.
On funding, which she has not made clear, Takaichi repeated her existing explanation. She said she would secure a permanent revenue source by reviewing spending and revenue across the board, without relying on special deficit-covering bonds, so as to win the market's trust.
Opposition doubts on prices
Opposition members noted that cutting the consumption tax rate on food and drink from 8% to 1% for two years may not lower shelf prices by the full 7%. Rising base prices could cancel out the cut, they argued.
Takaichi pushed back. Even if base prices rise through proper price pass-through, she said, the rate cut is sufficiently meaningful.
When pressed to reconsider cash handouts instead of a tax cut, she rejected the idea as time-consuming.
The Upper House differs from the Lower House, and the opposition will control many of its special committees. Critics have faulted Takaichi for her sparse attendance in the Diet, and some urged her to sit in on committees for a bill she has called her long-held ambition.
She will attend the first committee session on Friday, the 13th.
Trouble inside the LDP
In the Lower House, four veterans from her own Liberal Democratic Party, including former Prime Minister Shigeru Ishiba, stayed away from the vote in what amounted to a revolt.
The detailed design of the program is still not clear. Discontent with a bill one opposition figure described as meant to protect the prime minister's face is smoldering in the Upper House, and LDP executives are on guard.
The bill's passage could stall unless Takaichi brings opposition and independent lawmakers on board. The key to the deliberations rests with her.