Ballooning social security costs will force the Liberal Democratic Party to propose a consumption tax hike in the coming year so the new rate can take effect in 2009, according to LDP heavyweight Kaoru Yosano, who is versed in financial matters and a strong advocate of raising the levy.
"We will not be able to avoid mentioning the consumption tax rise (for 2009)," Yosano, 69, who was chief Cabinet secretary in the Shinzo Abe administration, told The Japan Times in a recent interview.
Fiscal 2009 is when the government's financing of the basic pension program will rise to half from the current one-third, and the money has to come from somewhere.