Japan PM vows to tackle debt, calls for teamwork

By Mari Yamaguchi

Associated Press

Published: Monday, Jan. 23 2012 11:00 p.m. MST

Workers clean before the opening ceremony of the ordinary diet session of the Parliament in Tokyo, Tuesday, Jan. 24, 2012.

Koji Sasahara, Associated Press

Enlarge photo»

TOKYO — Japan's prime minister pledged Tuesday to push for tax and social security reform, as he called on opposition politicians to help him rein in Japan's bloated deficit for the sake of future generations.

Prime Minister Yoshihiko Noda also promised to reduce the country's reliance on nuclear power over time and reiterated plans to devise a new energy policy by the summer. He committed to step up efforts to decontaminate the area around the crippled Fukushima nuclear power plant.

Noda's speech, outlining his policy priorities, kicks off what is expected to be a contentious parliamentary session dominated by debate over his goal to raise the sales tax to help ease revenue shortfalls caused by the country's aging population and shrinking work force.

Declaring that he wants to make this year "the first year of Japan's rebirth," Noda urged lawmakers to work together to achieve "decisive politics" amid widespread public weariness with political gridlock and squabbling.

"As things stand right now, the burden will be too heavy for the future generation," Noda said. "There's no time to put this off any longer."

Japan's national debt has grown to twice its GDP, and Noda said that stopgap measures repeatedly taken by his predecessors are no longer an effective solution. He has promised to submit a bill by end of March to raise the 5 percent sales tax in two stages to 8 percent in 2014 and 10 percent by 2015.

Noda's proposal faces opposition from within his own party, as well as from opposition politicians who control the less powerful upper house.

Noda warned that if Japan doesn't take urgent steps, it could face a debt crisis similar to the one gripping Europe.

"As global financial markets directly affect our economy, damage is irreversible once a nation's credibility is lost. We've already seen examples in Europe," he said.

Noda said tax breaks and other measures would cushion the impact of a sales tax hike on low-income citizens. The maximum tax rate for high income earners would be also raised.

He promised to first look for other sources of revenue, including the sale of government-owned assets, such as apartments for bureaucrats and their families, and liquidation of state-funded organizations.

Noda renewed his pledge to resolve the nuclear crisis at the Fukushima Dai-ichi plant, which was damaged by the March 11 earthquake and tsunami and went into a meltdown that spewed radiation into the surrounding region and forced 100,000 people to evacuate.

He promised to step up efforts to decontaminate the area around the plant, ensure health checks and measures to protect pregnant women and children from radiation and prompt smooth compensation for those affected by the disaster.

The government last month declared the plant had achieved "cold shutdown conditions," but Noda said the battle against the accident at the Fukushima Dai-ichi nuclear power plant is not over. "Without Fukushima's rebirth, there is no rebirth for Japan," he said.

On the diplomatic front, Noda said he is concerned about uncertainty over the security situation in the Asia-Pacific region. China is preparing for a leadership transition this year, and in North Korea, Kim Jong Un — believed to be in his 20s — has taken over as leader after the death of his father Kim Jong Il.

"Many countries are going through leadership changes this year, and the security environment surrounding our country is rather unpredictable," Noda said.

He said Japan's alliance with the U.S. will remain the "cornerstone" of the country's diplomacy as Tokyo seeks to play an active role to contribute to the stability and prosperity of the region.

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