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Japanese PM announces new Cabinet lineup

06-05-2012 09:17 BJT

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Japanese Prime Minister Yoshihiko Noda has announced a second cabinet reshuffle this year, replacing 5 of his 18 ministers. It’s a move aimed at winning crucial opposition support for his new tax bill, without which many economists predict will make the debt situation in Japan even more unsustainable.

Noda hopes the sacking of the ministers will pave the way to get a package of tax bills including a doubling of the sales tax approved. By removing the ministers, who the opposition has criticized for not performing properly, he hopes to convince the opposition party, the Liberal Democratic Party, to back the plan. The removed ministers include the country’s defence minister and the transport minister.

Noda said, "We must go through with this reform in order to make social security sustainable amid a tough fiscal situation. Is it right for us to leave the tab to the next generation indefinitely? With the realities we are facing, we must reach a firm conclusion during the current Diet session."

Noda argues that raising the 5 percent sales tax eventually to 10 percent is a must for Japan as it faces looming fiscal problems due to its aging population and demographic growth. The move would also be essential to curb Japan’s snowballing public debt. The debt currently exceeds the value of two years of economic output, the highest among industrialised nations. During a news conference on Monday, Noda also commented on the Yen’s recent appreciation.

Noda said, "The recent appreciation of the yen does not reflect Japan’s economic fundamentals. My understanding is that it is a one-sided movement."

Last week, the euro plunged to 11-year lows against the yen, raising concerns over its impact on Japanese export companies as a stronger euro weighs on their profits. Noda is hoping to pass bills linked to taxation as well as social security reforms before the parliamentary session ends on June 21.

 

Editor:Zhang Rui |Source: CNTV.CN

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