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Japan’s Prime Minister Naoto Kan has been an unpopular lame duck almost from day one. His premiership began with an unpopular proposed consumption tax hike and got worse after his directionless handling of the nuclear disaster in Fukushima. His popularity ratings are in the teens. Kan is apparently using his lack of popularity to his advantage. He is using his departure as a bargaining chip to push through three key pieces of legislation.
On Tuesday, the lower house of Parliament passed a key bond-issuance bill that will allow the government to issue more debt to cover 40% of the FY 2011 budget, the Wall Street Journal reports.
Kan’s Democratic Party of Japan came to power for the first time in 2009 on a platform of liberal policies and new spending programs. Most of their goals still have yet to be met. To get the bond-issuance bill past the opposition Liberal Democratic Party, the DJP had to cave on some of those programs.
The other pieces of legislation that Kan has set as preconditions for his departure are a disaster relief program, which passed and a bill that will provide feed-in tariffs for renewable energy.
Yoshihiko Noda, Japan’s Finance Minister, is waiting in the wings. He is widely seen as the the DPJ’s preferred successor. If he does, Noda will become Japan’s sixth PM in just five years.
Noda will have to contend with ballooning welfare obligations for Japan’s graying population as well as the reconstruction of the quake-afflicted Tohoku area. A fiscal hawk, his top priority is reigning in Japan’s stratospheric public debt, which stands at ¥943.809 trillion, ($12.34 trillion) about twice Japan’s gross domestic product. Like Kan, Noda will seek to increase the consumption tax from 5% to 10% to pare down the debt and keep the “Welfare Superpower” running.
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