Monday, January 28, 2008

Two-Month Extension Means Gasoline Tax Surcharge Will Prevail - Stay Tuned

The LDP-New Kōmeito coalition decided they couldn’t run the risk of allowing the gasoline tax surcharge to lapse after March 31. Today, it told the opposition parties that they would submit a bill to the Lower House tomorrow for a 2-month extension, which would surely give it ample time to use its Lower House supermajority to override an Upper House veto (or inaction after 60 days). They obviously figured that the confusion of a temporary lapse and the public backlash from reinstating the surcharge would be too much of a political risk to run*.

As I’ve said, there’ll be no turning back now. However, both sides will keep a close eye on public opinion (the DPJ in particular – it’s their modus operandi, while the LDP is more responsive to the status quo). You can bet the LDP and the DPJ will be running private polls of their own through major PR agencies to guide them through the turbulent months ahead. All this is bad for statecraft, mind you, but it will provide much fodder and guilty pleasure for us bloggers.

* Objectively speaking, this is a very sensible thing to do, no matter what the ultimate conclusion winds up being. But given the fact that no coalition member stands ready to be swayed by arguments to the contrary, I understand the opposition’s fury.

I had guessed here that the coalition would take a more conciliatory approach. Not for the first time... I’ll keep making these calls, though, because it’s an excellent learning tool. It helps me understand the political process, as well as my strengths and weaknesses. Looking back, I do appear to have a bias towards the softer conclusions. Wimp. In the future, I’ll try to follow more closely my rational, fact-based self.


MTC said...

Okumura-san -

Explain to me, because I am stupid, how the politics of this surcharge get better over time.

The only thing the ruling coalition had going for it was the sense of panic it had sown--that "if we don't act by March 31, confusion will reign! The local governments will fall; school buses will fall into ditches; tanuki and inoshishi will invade public housing!"

The ruling coalition will now lose the advantage of a bewildered and defensive electorate. The Democratic Party will have at least two months to further hone its explanation and lay out the reasons one should oppose this surcharge.

The ruling coalition will also have to use its override twice--once to pass the extension, next to pass the reapplication of the surcharge. The Democrats will receive from the LDP and the Komeito TWO instances of the ruling coalition selling out the nation in order to bail out one wealth-destroying industry.

Jun Okumura said...

I'm at least as stupid as you are then, because I have no idea which way public opinion will turn on this one. I wish I knew, because there would be a lot of money in that knowledge. What is pretty clear is that it is much easier to extend the surcharge than to reinstate it.

And it's not like they will be exercising it on two dissimilar issues. It’s the issue, not the number. Having said that, this is not like the refueling operations, where you as the electorate made up your mind (or decided you didn’t have to make up your mind), then put it away and moved on.

The fear factor needs to be broken down to its variety components, that is, the confusion over a short-term lapse and the long-term effects of a revenue drop, and the variety of constituencies.

As for “wealth-destroying industry”, I don’t think even the JCP will want to sell that to the public and the media. But that’s almost as unhelpful and intellectually unsatisfactory as the counterclaim that there are people who need all those roads. Better to focus on waste and corruption.

There are certain things that I would like to see happen through all this, and I just might abandon my usual disinclination to discuss my wants and decide to do a post around them. When I find the time, that is.

ross said...

I see the two-month extension as a toe in the water experiment. If the public goes ballistic that the LDP has to backtrack rapidly. But if the public response is muted to passing the short extension, that might defuse any later response. Still, the LDP is going to push this through no matter what, better it were done quickly.

ross said...

"then" the LDP has to backtrack, not "that"

Jun Okumura said...

It certainly has that effect, Ross. On the other hand, as you say, “the LDP is going to push this through no matter what”. So the greater the public backlash, the sooner the coalition will be coming forth with compromise feelers, if only to make the opposition look unreasonable. My guess is, the public response will be relatively muted; if nothing else, it’s still a couple of months away. But then, we rarely use our car, so it doesn’t hit home as hard for me

Martin J Frid said...

I love it, they have just announced that the bill is being withdrawn. "There is no turning back"... Seems there always is, when it comes to Japanese politics.

Kyodo and NHK World say they have agreed to accept a "mediation offer by House of Representatives Speaker Yohei Kono."

I still belive they should change the debate to discuss an environmental tax, like in the UK or Sweden, rather than a gasoline tax.

Jun Okumura said...


A GHG environment tax requires an overhaul of the entire gamut of hydrocarbon inputs, and the authorities are not ready to go there. To have the DPJ engage the LDP on the issue would in itself be progress on the issue, but my guess is that they won’t go there. The DPJ has chosen to get votes with We’ll reduce your gasoline bills, so it can’t turn around and tell the electorate, Hey, we’re gonna take the surcharge, make it permanent, but we’re gonna rename it. Ya happy?. No, that’s not going to work.