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Last Updated:  Thursday, 3 April, 2003, 16:42 GMT 17:42 UK
Cabinet row mars Japanese reform
Japanese Economics Minister Heizo Takenaka
Takenaka's new broom is facing opposition
A row has broken out between Japan's two top financial officials after one accused the other of lying.

Finance Minister Masajuro Shiokawa said Economics Minister Heizo Takenaka had lied when he said he had the support of Japan's prime minister for key tax reforms.

The row is set to complicate matters for the Prime Minister, Junichiro Koizumi, who has been criticised for failing to push through economic reforms.

The Finance Ministry is unhappy with the changes, and when Mr Shiokawa was asked about Mr Takenaka's comments he said they were "an outright lie".

"What Mr Takenaka said is wrong," Mr Shiokawa said.

Old vs new

The two men represent very different strands in Japan's politics.

Japanese Finance Minister Masajuro Shiokawa
Shiokawa: 'loose cannon' reputation
Mr Shiokawa is an 81-year-old veteran of the Liberal Democratic Party, a close-knit collecting of warring factions which has ruled Japan for all but a couple of years over the past half-century.

Mr Takenaka is a technocrat, a former official brought in to revitalise Mr Koizumi's ailing economic reform programme.

Many old-school LDP politicians, reliant for re-election on help from corporate sponsors, have been trying to block his attempts to sort out massive bank bad loans at a time when the stock market is at a 20-year low.

In Mr Shiokawa's case there is also the argument over the tax reforms, where the idea is to shift tax-collecting to the regions.

The Finance Ministry, which currently holds the purse-strings, is against the idea, despite support from the Home Ministry and from Mr Takenaka.


SEE ALSO:
Nikkei slides below 8,000
10 Mar 03  |  Business
Japan's desperate market move
07 Feb 03  |  Business
Japan reveals budget plans
20 Dec 02  |  Business
Disdain greets Japan reform plan
31 Oct 02  |  Business
Pressure mounts on Japan reformer
23 Oct 02  |  Business


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