October 28, 2014 / 8:24 AM / 3 years ago

Japan opposition DPJ takes aim at Abe govt scandals, Abenomics

TOKYO (Reuters) - Japan’s main opposition party vowed on Tuesday to pursue Prime Minister Shinzo Abe over a string of cabinet funding scandals that have dented his popularity ratings, and attacked his signature “Abenomics” economic revival recipe as a failure.

Japan's Prime Minister Shinzo Abe reacts as he speaks to the media at his official residence in Tokyo October 20, 2014. REUTERS/Toru Hanai

Democratic Party of Japan (DPJ) Secretary General Yukio Edano also said his party might have further revelations to make, but acknowledged it was too soon to say if fallout from the serial scandals would prove fatal for Abe’s administration.

“I think this is a body blow to the government,” Edano told Reuters in an interview on Tuesday.

“What we intend to reveal is that the (ruling) Liberal Democratic Party has not changed at all,” said Edano, who served as chief cabinet secretary at the time of the Fukushima disaster and later headed the ministry of economy, trade and industry.

Unlike his first, troubled 2006-2007 term, Abe’s current administration had been unscathed by scandal since he returned to power in December 2012. That changed drastically after he reshuffled his cabinet last month, opening the door to a slew of leaks about possible political-fund misdeeds by new ministers.

Two new ministers, including trade and industry minister Yuko Obuchi, resigned last week over the dubious use of funds.

Obuchi’s successor, Yoichi Miyazawa, swiftly came under fire, including for retaining shares in Tokyo Electric Power Co, the operator of the tsunami-hit Fukushima nuclear plant that his ministry oversees, and for potentially violating a ban on donations from a foreign-owned firm. This week, two more ministers acknowledged fund-related improprieties.

The scandals have provided a rare opening for a weak and fragmented opposition, which has been largely sidelined since Abe’s conservative LDP trounced the Democrats in the 2012 election. The LDP was plagued by money scandals during much of its decades-long reign before being ousted by the DPJ in 2009.

But while Abe’s popularity ratings dipped in most opinion polls conducted after the scandals broke, they are still hovering around 50 percent, and Edano said it was too soon to tell if further declines were in store, putting Abe at risk.

“It depends on us,” he said. Edano said not all the scandal revelations had originated with his party, but asked if the Democrats had more ammunition in store, he replied: “Of course we have.”

SALES TAX RISE, ELECTION CHATTER

In a nod to the risk that voters could grow weary of scandal talk when what they really care about is the economy, Edano said his party would put most of its energy into criticising Abe’s policies - including his Abenomics mix of hyper-easy monetary policy, fiscal spending and structural reforms.

Edano said the premier’s growth strategy was already proving a failure, and delaying an unpopular sales tax rise planned for next year would be tantamount to admitting policy defeat.

“If they don’t raise the sales tax while continuing to say Abenomics is a success, that would be the worst,” Edano said, adding both the economy and fiscal situation would worsen. Asked if postponing the tax hike would be the same as declaring Abenomics a failure, he said: “We think so.”

A law passed in 2012 requires a rise in the levy to 10 percent in October 2015 to rein in Japan’s bulging public debt. But the hike can be postponed if the economy looks weak. Surveys show a solid majority of voters oppose another tax rise.

Some Japanese media have begun to speculate that Abe - encouraged by the limited drop in his ratings - might call an election within the year while the opposition parties are ill-prepared. No lower house poll is mandated until 2016.

“We have to consider that an election could be called at time when we least want one,” Edano said.

But while the Democrats have yet to regain public trust after their massive election losses, the tide has begun to shift a bit, partly due to doubts about Abenomics, he added.

“Before, the headwind was so strong that we could hardly stand,” he said. “Now, I feel that while there is a headwind, there is also a wind at our backs.”

Reporting by Linda Sieg, Billy Mallard, Antoni Slodkowski, Kiyoshi Takenaka; Editing by Jeremy Laurence and Alex Richardson

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