JAPANESE PARLIAMENT PASSES 1987 BUDGET
Parliament's Lower House passed the 1987
budget shortly before midnight local time, official
parliamentary sources said.
    The move followed agreement by the ruling Liberal
Democratic Party to a proposal that could kill its plan to
introduce a controversial sales tax, political analysts said.
The move was seen as a major blow to Prime Minister Yasuhiro
Nakasone, the leading advocate of the five pct tax, they said.
    Some analysts said Nakasone may be forced to step down
after the June summit of heads of major industrial democracies
and before his one-year term is due to expire at end-October.
    Under the compromise agreed by the LDP and opposition
parties, Lower House Speaker Kenzaburo Hara will take charge of
the sales tax bill, appoint a ruling/opposition party council
to debate it and allow opposition leaders to review the present
tax system, analysts said.
    Hara also verbally agreed to scrap the sales tax plan
entirely if the joint council fails to reach agreement on how
to handle the tax.
    The opposition parties, who have been vociferously
attacking the sales tax plan for months, hailed the decision as
a great victory.
    The opposition parties had already delayed passage of the
budget for three weeks after the April 1 start of the fiscal
year by intermittent parliamentary boycotts.
    Although the LDP had more than enough votes to ram the
budget through parliament, it had been reluctant to do so for
fear of a backlash of public opinion, especially after its
setback in recent local elections due to the sales tax issue.
    The ruling party though was anxious to pass the budget
before Nakasone leaves next week for the U.S. So that he could
tell Washington the Japanese government was doing its utmost to
boost the sagging economy and imports.
    According to Kyodo News Service, Nakasone told reporters he
did not think the sales tax was dead.
    If the sales tax is dropped, it could prove a major boost
to the economy because it would increase the government budget
deficit, economists said.
    The sales tax was originally scheduled to be introduced
next January to help offset the loss of government revenues
stemming from a cut in income and corporate taxes due to go
into effect this month.
 REUTER
