Japan PM hopefuls clash on taxes

TOKYO: The candidates vying to be Japan's next prime minister clashed Wednesday on whether to raise taxes, with front-runner Taro Aso rejecting the move. The five candidates running in the Liberal Democratic Party (LDP) election to succeed Prime Minister Yasuo Fukuda outlined their policy ideas at a joint news conference after filing nomination papers. "I doubt we can raise the consumption tax right now because it would send a chill through the economy," said LDP Secretary General Taro Aso, widely seen as the front-runner.

Former defence minister Yuriko Koike, seeking to be Japan's first female prime minister, said she supported restoring the economy, which contracted in the second quarter, and opposed a tax hike. "We're not in a situation right now to raise the consumption tax. The government will have to cut unnecessary spending and try to make a more efficient administration," she said.

But Kaoru Yosano, the minister for economic and fiscal policy, said that Japan, which has the developed world's worst public debt, needed to take drastic action to repair the pension system. "As prime minister, I would like to leave Japan as a good place for future generations," said Yosano, a 70-year-old political veteran.

"We must ensure the sustainability of the pension and medical systems," he said. "While there are technical problems, the consumption tax is the unique solution to provide a stable source of financing." The other two candidates -- former defence minister Shigeru Ishiba and former minister for administrative reforms Nobuteru Ishihara -- both said it was premature to raise taxes.