July 11 (Bloomberg) -- Former Japanese ruling party leader Ichiro Ozawa formed a new political group today, challenging Prime Minister Yoshihiko Noda’s stances on increasing the sales tax and restarting nuclear reactors.
“I will devote all my efforts to this,” Ozawa said in Tokyo in announcing the name of his party, which can be translated as “The People’s Lives Come First,” and has 49 legislators. Last week he lead an exodus of about 50 lawmakers from the Democratic Party of Japan after the lower house of parliament approved Noda’s bill to double the five percent tax.
While the split left Noda with a reduced majority, the bill will probably pass through the opposition-dominated upper chamber thanks to a deal between the DPJ and the Liberal Democratic Party. Ozawa is likely to reach out to other disaffected DPJ members to try and halt or delay the legislation, analyst Koichi Nakano said.
“The question isn’t so much how many people Ozawa has as how many more DPJ lawmakers may leave,” said Nakano, a professor of political science at Sophia University in Tokyo. “The consumption tax could still be in jeopardy. Ozawa can’t be dismissed too lightly.”
Under the legislation, the tax would rise to 8 percent in 2014 and 10 percent in 2015. While Noda has insisted the measure is essential to confronting record debt and rising social welfare costs, opponents argue it would discourage consumption and fail to raise government revenue.
Noda’s decision to authorize this month’s reactivation of two atomic reactors after all 50 were taken offline following last year’s Fukushima nuclear disaster has been met with weekly protests in Tokyo. Polls show as many as three-fourths of Japanese voters oppose the restarts.
While Ozawa today reiterated that the tax increase bill must be stopped, he said on July 8 he isn’t targeting a no-confidence motion against Noda, something that could trigger the government’s downfall. His new group will have 37 members in the lower house and 12 in the upper house.
“Realistically we can’t pass a no-confidence vote just by ourselves,” Ozawa said on public broadcaster NHK’s “Sunday Debate” program.
He also said he is interested in exploring an alliance with Osaka Mayor Toru Hashimoto, whose One Osaka party aims to get 200 of the 480 seats in the next lower house election. Polls show Hashimoto has become the country’s most popular politician by calling for less central government control and spending cuts.
Given that Ozawa has criticized the DPJ’s decision to reduce child support payments, his overture to Hashimoto “is a non-starter,” Nakano said. “He has nothing in common with” the Osaka mayor.
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