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Japan lower house passes budget, PM's outlook bleak
Reuters - Wednesday, March 2
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By Chisa Fujioka and Yoko Kubota
TOKYO - Japan's government pushed through a 612 billion pound budget for the year from April in the lower house on Tuesday, but some MPs from Prime Minister Naoto Kan's own party boycotted the vote in a sign of his weakening clout.
Kan faces growing calls, including within his own ruling Democratic Party of Japan , to step down and break a deadlock in a divided parliament where opposition parties have threatened to block bills needed to make the 2011/12 budget work.
The DPJ had enough votes in the lower house to pass the budget, but it needs approval from the opposition-controlled upper chamber to pass related bills, including one to allow issuance of deficit-financing bonds and another on tax reforms that would lower the effective corporate tax rate.
Failure to pass budget-related bills could cause a shutdown of parts of the government within months, similar to what happened in the United States in the 1990s, and increase the chance of a downgrade of Japan's debt rating.
Kan held off submitting the related bills for the lower house vote after lawmakers from both camps shouted at each other and pounded tables in debate.
Kan, whose support ratings have sunk to about 20 percent, has few favourable options to break the deadlock, which is keeping him from dealing with issues such as huge public debt.
He has said an early election would only lead to uncertainty for the public and has rejected calls to quit. Kan, in office since last June, is already the fifth premier since 2006.
Sixteen lawmakers backing Kan's rival powerbroker boycotted the lower house vote on the budget, in an embarrassment for Kan and a sign of fraying unity in his party.
"On those in the party who intentionally boycotted the vote, I don't think the public will see them as acting responsibly as members of the ruling party," Kan's top aide, Chief Cabinet Secretary Yukio Edano, told a news conference.
"The party will seek the understanding of the public by dealing firmly with this matter."
DPJ executives will seek to punish the group by suspending the party membership of their leader for six months, while reprimanding the rest, party Secretary General Katsuya Okada told reporters.
Kan's rival and former party head Ichiro Ozawa objected on Tuesday to the DPJ executives' decision to suspend his party membership until his trial over suspected misreporting by his funding organisation is done, Kyodo news agency reported.
While it is unlikely that the party would reverse its decision on Ozawa, who has repeatedly denied any wrongdoing, the issue adds to Kan's long list of headaches.
DELAYING TACTICS
Opposition parties on Monday used various delaying tactics such as a motion to censure the chairman of the lower house budget committee to stall the budget vote. The vote finally took place around 3:30 a.m. on Tuesday .
The budget will now take effect from the start of the fiscal year on April 1, having cleared the lower house by March 2.
To pass the budget-related bills, however, the DPJ needs to cobble together a simple majority in the upper house or build a two-thirds majority in the lower chamber, which would allow it to override the opposition-controlled upper chamber.
But a former coalition ally has refused to cooperate on budget-enabling bills, including one allowing the issuance of deficit-covering bonds, meaning the DPJ has virtually no chance of securing a two-thirds lower house majority.
The two biggest opposition parties, trying to capitalise on Kan's unpopularity ahead of regional elections in April, have ruled out help in the upper house.
A poll by the Nikkei business daily on Monday showed support for his government down 9 percentage points at 22 percent, the lowest since he took office last June.
Opposition parties demand that the DPJ abandon the 2009 campaign manifesto that swept it to power and that Kan call a snap election, but analysts say it might not break the deadlock since no party would be likely to win an outright majority.
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