Kan's resignation saves pension 'reform'

The leader of Japan's largest opposition party, Naoto Kan, resigned this week over his non-payment of state pension contirbutions, effectively a form of tax-evasion. The contributions are deducted directly from the salary of most ordinary people, but some people, including the self-employed and politicians, have to make the payments themsleves. And a lot of politicians somehow forgot, including about half of the current cabinet and Kan, the leader of the opposition.
Kan's resignation followed that of Yasuo Fukuda, chief cabinet secretary - Peter Mandleson to prime minister Koizumi's Tony Blair, as it were. (American readers can compare him to Karl Rove instead). There has been much discussion about how this move by the ruling LDP (Liberal Democratic Party) forced Kan's hand, and even more about the succession in the opposition DPJ (Democratic Party of Japan). But the real story appears to be the way that Kan's resignation has drawn bad publicity away from the pension reform bill which the LDP and DPJ leaderships have been pushing and which has subsequently been passed by the lower house of the Japanese Diet (parliament).
According to an Asia Times report:

Even the conservative Yomiuri Shimbun newspaper offered Kan some backhanded praise in an editorial that noted that his resignation "has fulfilled his obligation" as signatory to a three-party accord as signed just before Fukuda announced his resignation last Friday.

The LDP and the DPJ agreed... to review the pension system by 2007 with an aim to unify all the public pension plans sometime in the future.

"His [Kan's] resignation prevented the agreement from becoming just a scrap of paper," the [Yomiuri Shimbun] newspaper said.

The actual package of pension bills on Tuesday in the Lower House was passed by a majority vote, with all votes along strict party lines. A final vote in the Upper House is expected the before the end of the current session on June 16.

For the public, the pension-reform bills consisted mainly of a plan to raise the premiums for mandatory national pensions operated by the government. By the year 2017, the monthly premiums will be raised from the current 13,300 yen (US$117) per month to a ceiling of 16,900 yen in 2017.

The reasoning is that money is needed to support the growing number of old people in Japan. But at same time, other legislation will lower the pension benefits paid by the government.

It should be noted that this is still basically the same premium-payment system into which some 40 percent of the pension payers, including elected members of parliament, resoundingly have chosen to evade paying. The bills will provide for tighter collection methods to be put in place.

In other words, the main opposition has colluded with the ruling party - to the rather extreme extent of the resignation of its leader - to lower pension payouts and increase payments. It is hardly surprising to see Japanese elites closing ranks like this - but it is appalling that they will get away with such radical action against the poor just when the Japanese economy is recovering, with - for example - Toyota posting profits of ¥1 trillion.