Japanese government faces heavy defeat in elections

Voters have dealt a blow to Japan’s new prime minister, Naoto Kan, after exit polls showed his party and its coalition had suffered a heavy defeat in today’s upper house elections.

The result could frustrate Kan’s plans to tackle Japan’s huge public debt, just 10 months after his left-of-centre Democratic party of Japan (DPJ) came to power in a landslide general election victory.

Kan conceded that public disquiet over his apparent enthusiasm for a rise in sales tax had contributed to his party’s losses. “I am sorry that my remarks were misunderstood,” he said. “The election result shows that the country needs to have a proper debate before any decision is taken on tax.”

Kan, Japan’s fifth prime minister in four years, warned last month that the country faced a Greece-style fiscal crisis unless it brought its ballooning debt under control and vowed to break the “taboo” on discussing tax reform.

Although he is not expected to resign, the vote could prompt a challenge to Kan — possibly from his party rival Ichiro Ozawa – when the DPJ holds a leadership election in September.

The party holds a comfortable majority in the lower house. But a loss of control of the upper chamber would hamper government plans for fiscal reform and end any discussion of a rise in sales tax to fund welfare spending in a country with an ageing population.

Kan, who became prime minister last month after the sudden resignation of the scandal-hit Yukio Hatoyama, vowed to stay on as leader, as his party began a frantic search for new coalition partners.

Exit polls after the election for half of the upper house’s 242 seats, showed the DPJ had won fewer than 50 of the contested seats, leaving it short of the 122 seats the party and its junior coalition partner, the People’s New party (PNP), need to retain their majority. Early indications were that the PNP would fail to win a single seat.

The main opposition Liberal Democratic party (LDP), was on course to win between 48 and 50 seats to give it a total 81-83, up from 71 before the election.

The DJP’s Renho Murata, who retained her seat, said her party, which had promised cleaner, more transparent politics, had disappointed voters since defeating the long-dominant LDP last August.

“In some respects we have not completely lived up to the expectations of the voters who gave us power … hoping to clean up politics,” she said. “I think the atmosphere has changed quite a bit since the elections last summer.”

Analysts said the poor poll result was a vote of no confidence in Kan’s administration. “The Democratic party will face an uphill battle in implementing policies, as the coalition seems to be losing its majority in the upper house,” said Tetsuro Kato, a politics professor at Waseda University.

He added: “This is probably not the kind of result that will force Kan to resign.”

Kan may instead turn his attention to Your party, a new group formed by disaffected LDP politicians, that, according to one poll, could win up to 10 seats. The party has called for drastic cuts in public spending, although its leader, the former financial services minister Yoshimi Watanabe, opposes a rise in the 5% sales tax.

New Komeito, the political arm of the Buddhist group Soka Gakkai, ruled out joining a coalition over Kan’s apparent enthusiasm for a sales tax increase after the next general election, due in 2013.

Sunday’s election is being seen as an early referendum on the Kan premiership. He took office on June 8 after Hatoyama resigned over a money scandal and his poor handling of the relocation of a US air base on the island of Okinawa.

After becoming leader, Kan moved quickly to shift the focus of economic policy from stimulus to reining in Japan’s public debt, which at almost 200% of GDP is the highest in the industrialised world.

After initial approval ratings of nearly 70%, his plans to start a national debate about doubling sales tax sent his ratings plummeting in the runup to the election. – guardian.co.uk

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