Resistance grows within Japan's LDP over Takaichi's tax-cut push

Opposition to Prime Minister Takaichi Sanae's consumption tax-cut policy is spreading within Japan's ruling Liberal Democratic Party, taking on the character of an intraparty power struggle.

According to the Nikkei and other Japanese media, non-mainstream and senior LDP lawmakers have been lining up to call the cuts "populism without a funding plan." The backlash is turning the tax issue into a rallying point for anti-Takaichi forces ahead of next autumn's party leadership election.

The government and the ruling party approved a plan on Aug. 5 to cut the consumption tax rate on food from 8 percent to 1 percent for two years starting in April next year.

Former LDP Secretary-General Moriyama Hiroshi publicly criticized the policy after a party meeting in Kagoshima on Friday, telling reporters that "a tax cut without sufficient funding will undermine the credibility of government bonds."

Moriyama had served as a senior official on the party's tax commission before stepping down after Takaichi took office. He has long emphasized fiscal discipline and has been critical of the prime minister's "responsible proactive fiscal policy."

Former Foreign Minister Kono Taro also made his opposition clear in broadcast appearances, saying "consumption tax is the funding source for social security," while former Prime Minister Ishiba Shigeru said the cuts would "only accelerate the yen's depreciation and push up prices." Former Defense Minister Inada Tomomi added her voice to the criticism, saying it was "not the LDP way to simply carry out whatever the party leader says."

Beyond these senior figures — all of whom have run for or expressed interest in the party leadership — discontent is also growing among officials on the LDP's tax commission, who feel the cuts were pushed through without following proper procedures. The opposition camp is now coalescing around General Affairs Minister Hayashi Yoshimasa, considered a leading contender for the next party leadership. Hayashi finished third in last October's leadership election, behind Takaichi and Defense Minister Koizumi Shinjiro.

Younger lawmakers with weaker electoral bases, however, continue to back the tax cuts, mindful of the cabinet's still-high approval rating in the 50 percent range and their prospects for the next party endorsement. The Nikkei said the intraparty conflict is expected to persist for now.