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Japanese Cabinet Conflict over Postal Reform Raises Questions About PM's Governance
Source: mdn.mainichi.jp
Source Date: Wednesday, March 31, 2010
Focus: Knowledge Management in Government, Institution and HR Management
Country: Japan
Created: Apr 06, 2010

A conflict within the coalition Cabinet over postal reform has called Prime Minister Yukio Hatoyama's leadership ability into question.

The government decided at a meeting of Cabinet ministers concerned Tuesday night to work out postal reform bills based on proposals by State Minister for Postal Reform Shizuka Kamei and Internal Affairs and Communications Minister Kazuhiro Haraguchi. A plan to raise the upper limit on postal savings from the current 10 million yen to 20 million yen, a focal point of the postal reform plan, would be reviewed if excessive funds flowed into the Japan Post Bank from private banks. In the end, despite vocal opposition within the Hatoyama Cabinet, the government has chosen to adopt Kamei's proposal.

Moreover, Japan Post group member companies would be exempted from the consumption tax levied on transactions made by other financial companies. The expansion of Japan Post Bank under the protection of the government could pose a threat to small and medium-sized financial institutions, eventually forcing the government to use taxpayers' money to bail out private financial institutions that face financial crises as a result of competition with the postal bank.

It was only natural that Deputy Prime Minister and Finance Minister Naoto Kan and State Minister for National Policy Yoshito Sengoku voiced opposition to Kamei's proposal shortly after it was unveiled on March 24.

The problem is that confusion over the proposal has invited derisive laughter from the public.

Kamei said, "I gained the prime minister's approval." However, Hatoyama denied that, saying, "I haven't given the green light."

Kan and Kamei subsequently quarreled over the issue on a TV program. "I haven't heard anything," Kan said, prompting Kamei to say, "You've got bad hearing."

It was just like a quarrel between children, as one opposition politician said, "This is not (an effective) national administration."

It is questionable that the government has ended up deciding to work out postal reform bills based on Kamei's proposal. Furthermore, one cannot help but wonder why Kan and Sengoku, who had voiced stiff opposition to Kamei's proposal, approved the decision saying, "We've left it up to the prime minister."

Moreover, the conflict has raised doubts about the degree of Prime Minister Hatoyama's sense of urgency over the issue. After a meeting between Cabinet ministers concerned on Tuesday, Hatoyama said, "We need to make a prompt decision."

Hatoyama knew that a review of postal privatization is the top priority policy issue for the ruling coalition partner People's New Party (PNP) led by Kamei. Even though he was fully aware of Kamei's opinion on postal reform, Prime Minister Hatoyama failed to hold in-depth discussion within the government on it apparently because he simply postponed a decision on the sticky issue.

Confusion over the relocation of U.S. Marine Corps Air Station Futenma in Okinawa Prefecture has also damaged the public's confidence in the Hatoyama administration. The prime minister had initially declared that the government would decide on a relocation site by the end of March, but he now says, "We're not legally required to make a decision within this month."

The government appears to have lost a sense of tension after the Diet approved the fiscal 2010 state budget. With the House of Councillors election to be held in summer, the PNP and another coalition partner, the Social Democratic Party (SDP), will certainly put forward their own policies.

One cannot help but wonder when the prime minister will demonstrate his leadership. If the current situation continues, the Hatoyama administration will only remain in chaos.
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