UPPER HOUSE ELECTIONS: A VOTER REVOLT IN

UNCLAS SECTION 01 OF 03 OSAKA KOBE 000187

SIPDIS

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON JA
SUBJECT: UPPER HOUSE ELECTIONS: A VOTER REVOLT IN
WESTERN JAPAN



1. (SBU) SUMMARY: Voters in western Japan lashed out
at the ruling LDP coalition in last weekend's Upper
House elections. This anger stems from several factors,
including resentment of the LDP's tax policies, especially
a number of governmental blunders that increased the
tax burden of traditional LDP supporters prior to the
elections. The LDP was also hurt by Prime Minister
Shinzo Abe's inadequate explanation of his economic
reform agenda. Seeking change, conservative voters
turned to young opposition candidates who often lacked
negative political baggage. Several politicians who
were expelled from the LDP for opposing former PM
Koizumi's postal reforms staged their revenge on the
coalition, greatly diminishing the influence of several
party heavyweights in the district. Finally, the
opposition ran a smart campaign that drove deep into
traditionally solid LDP territory. END SUMMARY

IT'S THE ECONOMY, STUPID
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2. (SBU) In both rural and urban areas of our district,
it was economics, largely tax issues, that caused such
fury among voters and did in the Liberal Democratic
Party (LDP) in Upper House elections on July 29.
Elderly farmers, always reliable LDP voters, were
already angry over encroachments on their protected
status after former PM Koizumi's economic
liberalization programs. But SMEs and merchant
associations also reported to us in Osaka, Nara and
Okayama that they were fed up with LDP tax policies, so
they did not vote for the LDP. Importantly, they
stated that they may continue to withhold support for
the LDP, depending on the party's future tax policies.
It was the end of popular tax breaks, the increase in
local taxes, the rise in pension premiums and, lastly,
the infamous pension payment fiasco, most of it
unfortunately occurring close to the elections,
that created the perfect storm of a taxpayer's revolt
against the ruling party.


3. (SBU) According to local media reports and
conversations with econoff after the elections, Osakan
corporations and large business organizations have
begun asking politicians from the LDP and the DPJ to
work together in a cooperative and practical manner so
that important economic reforms are not derailed.
Priority issues for these organizations are structural
reform, tax reform, a reduction in government spending,
public pension reform, and a restoration of the
public's trust by stamping out political money scandals.
Although large companies are disappointed by the LDP's
historic defeat, executives were not exactly surprised.
According to one interlocutor, PM Abe's economic
policies have been unclear from the beginning, and thus
difficult for the general public to support.

YOUNG NEOPHYTES TRIUMPHED IN CONSERVATIVE DISTRICTS
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4. (SBU) Six out of our thirteen single seat district
races were won by young political neophytes from the
opposition Democratic Party of Japan (DPJ) and People's
New Party (PNP) in Kagawa, Kochi, Okayama, Shimane,
Ehime, and Toyama. These are among the most
historically solid conservative regions of our district.
Kochi was a toss-up until the end, but it was still
surprising to see the LDP completely lose the island of
Shikoku for the first time in the party's
existence. In addition, 32-year old Satoshi Umemura,
a political newcomer running on the DPJ ticket in Osaka,
was the top vote-getter in the entire country. The
single seat matchups were inevitably between a very
old LDP incumbent and a youthful opposition contender -
- not exactly good optics for the ruling coalition.
Conservative and elderly voters sought change in
western Japan. Although this backlash and search for
policy change could be a statistical blip, it could
also turn out to be the beginning of the end of the so-
called rural "conservative kingdoms" of western Japan.


5. (SBU) Traditionally, the Communist or Socialist
parties have been the beneficiaries of voter backlash

OSAKA KOBE 00000187 002 OF 003


against the ruling party in the Kansai. This time, our
interlocutors tell us the DPJ positioned itself to
capture those disenchanted voters, both unaffiliated
voters and card-carrying LDP members. Compounding the
difficulty of the LDP to carry the smaller towns and
agricultural centers, its junior partner Komeito party
is weaker in these areas, which made it difficult for
Komeito to bring out its support network to offset this
disenchantment.

POSTAL REVENGE
--------------


6. (SBU) Victorious candidates Yoshihiro Kawakami in
Tottori, Akiko Kamei in Shimane, and Yumiko Himei in
Okayama all were part of the latest act in the postal
rebel drama of the 2005 Lower House elections. None of
their victories would have been conceivable without the
LDP status quo being stirred up by Koizumi's postal
privatization campaign two years ago. Kawakami was a
former postal rebel, expelled from the LDP for opposing
PM Koizumi's postal reforms. He used his extensive
experience and networks to overtake the stalled LDP
incumbent as a newly minted DPJ politician. Kamei is
the daughter of the Secretary General of the PNP, which
was founded by prominent postal rebels. Supporters of
former METI Minister and postal rebel Takeo Hiranuma
defected to the DPJ's Himei despite Hiranuma's stated
support for the LDP candidate, Toranosuke Katayama, the
number two LDP officer in the Upper House. Shockingly,
the veteran Katayama lost his seat in the biggest upset
of the elections.

DONS DIMINISHED
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7. (SBU) Mikio Aoki of Shimane (the leader of the LDP
caucus in the Upper House) and LDP Secretary General
Hidenao Nakagawa of Hiroshima have announced they will
step down from their party posts in order to take
responsibility for the LDP blowout. Taken together
with Katayama's sudden departure from the political
scene, these elections diminished the influence of
several of western Japan's most powerful LDP
politicians.

THE OPPOSITION'S VIRAL MARKETING
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8. (SBU) DPJ Chief Ozawa started on the campaign trail
in support of DPJ candidates not in trendy Tokyo, like
PM Abe, but in an economically blighted rural community
in Okayama. The voters there felt as though they had
been ignored by Katayama, according to one local
observer. Those voters remembered Ozawa's gesture, and
they came through for him in supporting his candidate,
the young Himei. Another DPJ leader in Okayama, Satsuki
Eda, made clever use of the candidates' names ("Himei"
includes the Chinese character for "princess" and
Katayama's first name includes the character for
"tiger") in order to create an election battle between
a princess and a tiger that sounded more like Chinese
mythology than a calculated campaign. The DPJ grabbed
the voters' attention and created buzz in rural Okayama.
(Note: The princess appellation even spread north to
neighboring Shimane, where Kamei capitalized on her own
"royal" lineage as a direct descendent of local feudal
lords. End note) Katayama apparently seldom campaigned
in his own prefecture and was caught by surprise at his
poor polling numbers too late to counteract this
insurgency.

COMMENT
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9. (SBU) Farming communities and small cities in western
Japan are traditional bastions of LDP strength. However,
the LDP's overconfidence, as witnessed by Katayama's
campaign, its numerous gaffes, money scandals
and its missed opportunities to explain the need for
painful change in order to reform rural Japan's moribund
economy, worked to hand victory to the opposition in the
Japanese hinterland. The DPJ discovered and exploited the

OSAKA KOBE 00000187 003 OF 003


weak underbelly of a governing party that had grown
complacent. It may have been a fortuitous combination of
strategy and serendipity, but the DPJ and PNP found
themselves well-positioned to capitalize on growing voter
angst.

KINGMAN