(For more stories on Japanese politics click [ID:nPOLJP])
* Ruling party, at risk of defeat, unveils election
* Ruling LDP promises to boost household disposable income
* LDP portrays self as fiscally responsible party
(Adds PM comments)
By Linda Sieg and Chisa Fujioka
TOKYO, July 31 Japan's main ruling party,
facing possible defeat in elections next month, tried to
upstage the opposition on Friday with its own policy pledges to
boost household income and revive the struggling economy.
Prime Minister Taro Aso also portrayed his ruling Liberal
Democratic Party (LDP) as more responsible on fiscal policy and
security issues, promising to repair tattered public finances
and continue Japan's naval missions abroad.
The pledges came as data showed Japan's jobless rate rose
to a six-year record high of 5.4 percent, reinforcing views
that the job market will take time to recover despite recent
improvements in industrial output. [ID:nT23765] [ID:nT269047]
"The difference between us and other parties is that we
have the ability to take responsibility," Aso told a news
conference where the platform was unveiled.
The LDP promised in its platform to boost disposable
household income on average by at least 1 million yen ($10,470)
by 2020 and achieve economic growth of 2 percent by the second
half of the fiscal year from April 2010. [ID:nT187654]
To address bulging public debt, the LDP pledged to raise
the 5 percent sales tax once the economy recovers to help fund
the growing costs of a fast-ageing society.
Surveys show the LDP is at risk of losing to the opposition
Democratic Party of Japan (DPJ) in the Aug. 30 general
election, which would end more than half a century of almost
unbroken reign by the business-friendly party. [ID:nT44020]
HAVING IT BOTH WAYS
While an opposition win would not mean a drastic shift in
policies, it would raise the chances of breaking a stalemate in
parliament, where the Democrats and smaller allies control the
upper house and can delay bills.
The opposition Democrats have promised to put more money in
the hands of consumers by providing child allowances,
eliminating expensive highway tolls and making gasoline cheaper
to boost domestic demand.
They argue their spending plans are fundamentally different
from the LDP's traditional emphasis on policies that benefit
industries and firms. [ID:nT115439]
The Democrats said on Friday their spending plans would
raise economic growth by two percentage points in the fiscal
year from April 2012 and rejected accusations of fuzziness on
"We have the funds, it's just a question of
prioritisation," Democratic Party policy chief Masayuki
Naoshima told Reuters in an interview. [ID:n320130]
The party has ruled out raising the sales tax for the next
four years and argues that its spending plans can be financed
through measures such as tapping special reserves, reducing
government staff and cutting public works projects.
The LDP, which has attacked the Democrats as being
profligate, risked being criticised for echoing the
opposition's focus on consumers.
"They are disparaging the Democrats ... as fiscally
irresponsible," said Koichi Nakano, a professor at Tokyo's
Sophia University. "If they start to do something else because
they are worried about the effectiveness of the DPJ campaign,
they will look somewhat schizophrenic."
Robert Feldman, chief economist at Morgan Stanley in Tokyo,
said the LDP -- which has already backtracked on previous
fiscal reform targets -- needed to spell out details of how it
would reduce the public debt, already nearly 170 percent of
"All they have said is that they will make the economy
better and then will hike taxes. That doesn't cut the mustard
as an economic policy," he said.
Four years ago, charismatic leader Junichiro Koizumi led
the LDP to a huge victory a lower house election on a platform
promising to push ahead with market-friendly structural
reforms, but such measures got hardly a nod in the new party
"In recent years, we pushed for reforms to energise the
economy, but distortions such as gaps in income and the
impoverishment of the regions have increased. We cannot
continue to ignore such problems," Aso said.
Aso stressed the LDP's commitment to Japan's tight security
alliance with the United States and criticised the opposition
Democrats for flip-flops over security policy.
Opposition Democratic Party leader Yukio Hatoyama said this
week that he would end a refuelling mission in support of
U.S.-led forces in Afghanistan in January, appearing to
contradict comments by two senior party officials.
"We can not entrust the safety of Japan to a party that
wavers on the fundamentals of this country's security policy."
(Additional reporting by Yoko Nishikawa and Hideyuki Sano,
Editing by Nick Macfie)