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August 1, 2009

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Aso reveals game plan for election

JAPAN'S main ruling party, facing possible defeat in elections this month, tried to upstage the opposition yesterday with its own policy pledges to boost household income and revive the struggling economy.

Prime Minister Taro Aso portrayed his ruling Liberal Democratic Party as more responsible on fiscal policy and security issues, promising to repair tattered public finances and continue Japan's naval missions abroad.

The pledges came as data showed Japan's jobless rate rose to a six-year record high of 5.4 percent, reinforcing views that the job market will take time to recover despite recent improvements in industrial output.

"The difference between us and other parties is that we have the ability to take responsibility," Aso told a news conference where the platform was unveiled.

The LDP promised in its platform to boost disposable household income on average by at least 1 million yen (US$10,459) by 2020 and achieve economic growth of 2 percent by the second half of the fiscal year from April 2010.

To address bulging public debt, the LDP pledged to raise the 5 percent sales tax once the economy recovers to help fund the growing costs of a fast-aging society.

Surveys show the LDP is at risk of losing to the opposition Democratic Party of Japan in the August 30 general election, which would end more than half a century of almost unbroken reign by the business-friendly party.

While an opposition win would not mean a drastic shift in policies, it would raise the chances of breaking a stalemate in parliament, where the DPJ and smaller allies control the upper house and can delay bills.

The DPJ has promised to put more money in the hands of consumers by providing child allowances, eliminating expensive highway tolls and making gasoline cheaper to boost domestic demand.

The DPJ said yesterday their spending plans would raise economic growth by 2 percentage points in the fiscal year from April 2012 and rejected accusations of fuzziness on funding.

"We have the funds, it's just a question of prioritization," DPJ Policy Chief Masayuki Naoshima told reporters in an interview.

The party has ruled out raising the tax on sales for the next four years and argues that its spending plans can be financed through measures such as tapping special reserves, reducing government staff and cutting public works projects.

The LDP, which has attacked the Democrats as being profligate, risked being criticized for echoing the opposition's focus on consumers.

"They are disparaging the Democrats ... as fiscally irresponsible," said Koichi Nakano, a professor at Tokyo's Sophia University.

"If they start to do something else because they are worried about the effectiveness of the DPJ campaign, they will look schizophrenic."


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