Prime Minister Yoshihiko Noda on Friday urged opposition parties as well as members of his own Democratic party of Japan (DPJ) to cooperate in passing a contentious bill to hike the consumption tax to 10% by 2015.
Friday's deliberations in the lower house of the Diet are part of discussions on a set of seven bills on social security and tax reform. Noda has said he intends to stake his political career on getting the bills passed during the current Diet session which ends on June 21.
But he faces a rocky road with opposition to the unpopular tax hike both inside and outside the DPJ. Noda is playing a balancing act between keeping his fragile coalition together and seeing through the bill's passage.
Speaking in the Diet, the prime minister said that the future of Japan's economy rests on tackling its public debt while financing an increasingly expensive social welfare system.
He said a big river separates the two sides but added that the public expects them to build a bridge.
"We must create a society in which people can be assured that tomorrow will be better than today," he said. "We must weigh the sustainability of social security. Everybody has fears about their post-retirement years. We must remove these fears and that is the most important point of this reform.
"Now it is time for the whole Diet to make a decision without any postponement, strictly for the benefit of people."
Besides the opposition LDP and New Komeito, the DPJ's former head and major political power broker Ichiro Ozawa, who leads the party's anti-tax group, is against the tax hike.
Opposition parties said that if Noda can't persuade his own party to approve the tax hike, then he should reconsider his stance.
Noda said the extra revenue is needed to cover Japan's snowballing social welfare costs, including public pensions and a universal health insurance system in a country that boasts one of the world's highest life expectancy rates.
Only about 40% of what the government currently spends comes from taxes.
The rest is financed by borrowing, leaving Japan's debt at more than double gross domestic product, with analysts warning that only higher tax revenue or spending cuts can bridge the gap.© Japan Today/AFP