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Japan’s LDP May Agree to Pass Noda’s Sales Tax Bill Tomorrow

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Aug. 7 (Bloomberg) -- Japan’s main opposition party may agree to pass Prime Minister Yoshihiko Noda’s bill to double the sales tax in the upper house of parliament tomorrow, the party’s No. 2 official said.

“If the visibility is good, the waves are quiet and we receive a request, we will accept, as long as there are no problems before Aug. 8, and vote in favor,” Nobuteru Ishihara, secretary general of the Liberal Democratic Party, told reporters today in Tokyo. “But if problems arise before that there could be circumstances where we don’t agree to it.”

Having already passed the lower house, ratification in the opposition-controlled upper chamber would bring Noda the biggest legislative victory of his 11-month administration. Noda has said the bill must be enacted to cope with the world’s largest debt and soaring welfare costs, overcoming resistance in his own Democratic Party of Japan.

Smaller opposition parties submitted a no-confidence motion against Noda to the lower house of parliament and a censure motion to the upper house today in a bid to stop the bill. Votes on the measures, which can’t pass without support from larger parties, have yet to be scheduled.

Ishihara didn’t rule out his party submitting similar motions, something that would imperil a three-party deal to raise the five percent sales tax. The LDP is seeking a pledge from Noda, whose support is plunging, to call early elections that could end the DPJ’s three-year hold on power.

Party Rift

Passage of the unpopular legislation through the lower house in June split the ruling party as dozens of lawmakers left. Noda, the DPJ’s third prime minister since it ousted the LDP three years ago, saw his approval rating fall three percentage points to 22 percent from last month, according to an Asahi newspaper poll published yesterday.

LDP leader Sadakazu Tanigaki said last month in an interview with Bloomberg that Noda should dissolve parliament in August, and he threatened to submit a no-confidence motion. Noda need not call an election until August 2013 and polls indicate the DPJ would lose a large number of seats. The DPJ’s support rate fell two points to 13 percent, the same level as the LDP, according to the Asahi. The paper surveyed 1,540 people on Aug. 4-5 and provided no margin of error.

To contact the reporter on this story: Isabel Reynolds in Tokyo at ireynolds1@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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