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Vol. 37, No. 1, February 2010


On Christmas Eve, 2009, the cabinet of Prime Minister Hatoyama Yukio marked the hundredth day since its launch on September 16. The cabinet today is seeing its support ratings decline rapidly. An opinion poll whose results were published in the December 21 Asahi Shimbun found that just 48% of respondents approved of the cabinet, a plunge from the previous month’s figure of 62%; the disapproval rate climbed from 21% to 34% over the same period.

Prior to this, the cabinet had enjoyed consistently high support figures thanks to public hopes for the new government and the popular budget-review process carried out by the Government Revitalization Unit in November.

There is just one reason for the sudden plunge in the cabinet’s fortunes toward the end of 2009: Prime Minister Hatoyama’s failure to show any leadership at all. This failure can be divided into three problems. First, Hatoyama has not clearly spelled out his own ideas on the key policy issues facing the nation. Second, the cabinet lacks a coherent voice due to a lack of clear instructions from the prime minister. And third, as a matter related to the second problem, Hatoyama has been unable to control the junior partners in the ruling coalition, the People’s New Party and Social Democratic Party. Into this leadership vacuum has stepped DPJ Secretary General Ozawa Ichirô, who has begun wielding considerable influence in the policy arena in addition to steering the party ship.

The issue of the relocation of the US Marine Corps Air Station at Futenma, Okinawa, was one of the first where Hatoyama failed to show leadership. His statements on this topic have displayed a lack of caution and bewildering shifts in his position. On October 7 he implied that he might not keep his party’s election manifesto pledge to reexamine the realignment of US military forces in Japan, stating that the promise could change due to "the time factor," and hinted that his government would not necessarily insist on reviewing Japan’s agreement with the United States to move the Futenma facility to Henoko, also on Okinawa. The next day, however, he changed tack again with a statement that this did not mean he would go along with the agreement made by the previous administration. On November 13 Hatoyama and US President Barack Obama agreed to set up a working group to tackle the issue of relocating the Futenma base. In the press conference following the summit, Hatoyama stressed that his cabinet "takes the US-Japan agreement reached under the previous government very seriously . . . this is a very difficult issue, and I am aware it will become even more difficult to resolve as time passes. . . . [W]e understand the need to resolve the issue as soon as possible within the Working Group."

The standard way to interpret this would be as a promise to honor the previous agreement to move the facility to Henoko and to reach a solution as soon as possible. The next day, however, Hatoyama stated that while Obama might feel the bilateral agreement would form the basis of any steps taken, if the matter had already been decided with such certainty there would be no need for the working group. Finally, on December 15 the prime minister communicated to the Americans his decision to bring the process of considering relocation of the Futenma facility back to square one. Behind this decision was the hint from SDP leader Fukushima Mizuho, state minister for consumer affairs in Hatoyama’s cabinet and a staunch opponent of the Henoko relocation, that her party would leave the coalition if the bilateral agreement went through.

All this time, the other members of Hatoyama’s cabinet were unable to speak on it with a single voice. Minister for Foreign Affairs Okada Katsuya began by pursuing a plan to merge the functions of Futenma with the nearby Kadena Air Base. Minister of Defense Kitazawa Toshimi, meanwhile, expressed steady support for the Henoko relocation plan.

The prime minister’s lack of convincing leadership has been apparent on the economic policy front as well. It was evident in early December, when the cabinet unveiled its stimulus package. Kamei Shizuka, head of the PNP and state minister for postal reform and financial services, had insisted on boosting expenditures in the stimulus plan, making it difficult to reach a cabinet decision. The coalition partners finally agreed to an expanded ¥7.2 trillion package.

This lack of leadership at the top will become especially clear in the process of putting together the annual budget for fiscal 2010 (April 2010–March 2011). This year’s budget requests from the ministries total some ¥95 trillion. The initial fiscal 2009 budget put together by the previous cabinet, that of the Liberal Democratic Party’s Asô Tarô, totaled ¥88.5 trillion; viewed simply, this year’s figure appears to be the ¥7.1 trillion needed for the child allowances and other new measures listed in the DPJ’s manifesto added to that amount. The Government Revitalization Unit’s efforts to eradicate waste from ministry budget requests knocked just ¥1.7 trillion off of the total. If the Democrats carry out the abolition of the provisional gasoline tax and other tax reduction measures spelled out in their manifesto, national tax revenues for the fiscal year are expected to go no higher than ¥38 trillion, leaving a ¥55.3 trillion gap to cover.

Despite this, Hatoyama has repeatedly stressed his intent to hold government bond issuance to ¥44 trillion. This leaves an ¥11.3 trillion hole to fill on the revenue side. There are three ways to overcome this: by securing major new inflows of nontax revenue, by coming up with new sources of tax revenue, or by revising the pledges in the DPJ manifesto, abandoning tax reductions or slashing the child allowances and other programs involving new expenditures. But the prime minister has revealed no comprehensive plan for addressing this revenue shortfall, and neither has the National Policy Unit, headed until early January by Deputy Prime Minister Kan Naoto. (In his article in this section, Itoh Motoshige proposes the ideal form for this unit to take as it carries out its tasks.)

Ozawa Ichirô has been wielding even greater authority in the absence of leadership from the prime minister or the Kantei, his office. Within the DPJ Ozawa’s influence is now enormous. There are two sources of his authority. First is the considerable sway he holds among the Democrats who made it to the Diet in the elections for the House of Councillors in July 2007 and the House of Representatives in August 2009, two contests in which Ozawa was the strategic architect of the DPJ victories. Second is his position as secretary general, an office he has held since the cabinet was launched in September. This post comes with sweeping control in such areas as selecting people to fill party posts, formally recognizing DPJ candidates, and allotting political funds to party members. Ozawa has been putting this authority to use in influencing cabinet selections.

The DPJ, however, pledged in its manifesto that it would concentrate decision-making power in the cabinet. Ozawa has in general supported this position, avoiding the appearance of giving the cabinet instructions on policy matters. On December 16, however, this support gave way to a more meddlesome approach as Ozawa presented the cabinet with requests on the content of the fiscal 2010 budget, positioning them as the DPJ’s collective desires based on lobbying from throughout the nation. Particularly significant among these requests were two not in line with the Democrats’ manifesto pledges: the retention of the provisional taxes on gasoline and other products, which the manifesto promised to abolish, and the setting of a household income cap for child allowance eligibility, a limitation not mentioned in the election campaign document.

On December 21, Prime Minister Hatoyama decided to accept the secretary general’s demands almost in their entirety. He announced that while the provisional gas tax would be abolished, new taxes would be levied to keep taxation rates and revenue at the same level. On the topic of income caps for child allowance eligibility, meanwhile, Hatoyama held firm, deciding not to deny payments to households in higher income brackets.

One upshot of all this was heightened attention focused on Ozawa’s considerable influence on the budget-crafting process. Some media organizations began describing the Hatoyama cabinet as being governed behind the scenes by Ozawa, a view that has some credence. There is another way to see this situation, though. There are limits to how much nontax revenue can be secured to cover spending in the 2010 budget, and it is also difficult to come up with fresh tax revenue streams. This makes the third option unavoidable: revising the pledges in the DPJ manifesto. One of the most pragmatic choices that could be made here is to abandon plans to do away with the provisional taxes. Despite this, though, Hatoyama vacillated rather than making the needed decisions. This may well have been the primary reason that Ozawa intervened in the policymaking process, seemingly turning his back on his previous support for the unification of decision-making functions in the cabinet. In this section we also carry an informative piece by Kakizaki Meiji that provides more detail on Ozawa’s increasing influence.

Hatoyama cannot expect smooth sailing ahead. On the diplomatic front, Japan’s relationship with the United States is going downhill; domestically, the prime minister’s leadership deficit has become clear from the process of drawing up the budget. And at the same time, the DPJ’s manifesto promises to concentrate policymaking power in the cabinet and enhance the Kantei’s leadership capabilities are going unfulfilled. Even as the prime minister’s support ratings drift downward, he is coming to the end of his "honeymoon period" with the media. On January 18, Prime Minister Hatoyama will open the ordinary session of the Diet facing challenging conditions. (Takenaka Harukata, Associate Professor, National Graduate Institute for Policy Studies)

© 2010 Japan Echo Inc.