Ishiba Races to Build Japan Coalition With His Job at Risk

(Bloomberg) -- Japanese Prime Minister Shigeru Ishiba must quickly cobble together additional support for his administration if he is to survive as leader, following the first defeat for the ruling coalition since 2009.

Ishiba’s decision to call a snap election before he had even become prime minister proved to be a bad gamble on a potential popularity bump for a new leader. Instead voters showed they remained unconvinced that merely installing a new face at the head of the party would mean material reform of the party’s behavior after a slush-fund scandal. 

His miscalculation leaves him scrabbling to shore up a weakened coalition. He’ll likely need to reach out to smaller opposition parties and punished party members who were stripped of official backing for secretly lining their pockets from fund-raising events in the scandal.

Still, Ishiba probably remains the LDP’s best shot at clinging to power given his personality as a leader who can work with other parties rather than antagonize them, even if his longer-term future at the helm of the LDP looks murky.

“The most likely outcome is you get an LDP-Komeito minority government with limited partner agreements, but if the LDP can’t get higher numbers even that’s not guaranteed,” said Tobias Harris, founder of Japan Foresight LLC. 

Given the number of permutations still in play, Harris didn’t rule out the possibility of Ishiba standing down. 

The vote count shows the LDP and Komeito with a combined 215 seats, and the rest with 250 seats, according to NHK. The main opposition Constitutional Democratic Party of Japan has secured 148 seats, the broadcaster said. 

Of the 10 disgraced members of the party and two who were expelled from the LDP, only four have won their seats, according to NHK. That leaves Ishiba in a bind if he had hoped to rely on their support alone for the coalition. The prime minister needs to reach the magic 233 number to ensure he can win a parliamentary vote to stay on as premier.

Given strong public resentment over the scandal, it’s unlikely Ishiba would want to formalize their support in any way. But as many of them, including former trade ministers Koichi Hagiuda and Yasutoshi Nishimura, are veteran heavyweights of the party it’s highly unlikely they would risk sabotaging the formation of an LDP-led coalition going forward even if they have an ax to grind with Ishiba.

1993 Precedence

The 1993 lower house election offers a precedent for the LDP winning the most votes but failing to form a government because they couldn’t muster enough support for the prime minister to continue. 

A key difference is that opposition parties were strongly united around the need for electoral reform at the time, a factor that enabled seven of them to form a coalition and push the LDP out of power for the first time since 1955. 

After passing legislation to introduce an element of proportional representation into elections, the multiparty administration quickly fell apart and the LDP got its chance to return to power in an unlikely grand coalition.

Constitutional Democratic Party leader Yoshihiko Noda made clear Sunday he was not interested in a grand coalition after this election. Noda said he would seek to build an opposition coalition that can oust the LDP.

But in the battle of numbers, Ishiba may be able to form a coalition with fewer compromises than Noda.

Ishiba may first reach out to the Democratic Party for the People, whose uptick in seats would likely get him over the line to form a government. Yuichiro Tamaki, leader of the DPP, said Sunday he wouldn’t negotiate with the LDP over joining its coalition, but he has already indicated his willingness to cooperate on specific issues if policies align.

While refusing to join an LDP-led coalition may be a negotiating tactic on his part, Tamaki’s pet policy of expanding non-taxable income might be a relatively easy lift for Ishiba if it meant staying in power.

Historically, it might make more sense for the DPP to hook up with Noda’s CDP, seeing as they are both remnants of the Democratic Party of Japan, the only party that truly has experience of crushing the LDP. 

The DPJ won a landslide in 2009, but quickly ran into trouble after overpromising on the removal of a US base from the southern island of Okinawa. Its handling of the massive earthquake, tsunami and nuclear meltdown disaster also came in for criticism as its administration fell into disarray with Noda losing the 2012 election as the DPJ’s third prime minister in three years.

The eventual splitting up of the DPJ saw most members move to the CDP, while more conservative members led by ex-finance ministry officials coalesced into the DPP.

The problem for Noda is allying with the DPP won’t give him the numbers. He’ll need to reach out to the Japan Innovation Party (Ishin), whose stronghold is in Osaka, and whose policies are less progressive.

“Ishin is going to have to be part of any discussions. There are some big ticket items they might want in any talks, such as support for creating Osaka-to,” said Harris, referring to the party’s long-held goal to turn Osaka into a metropolitan entity without a parallel prefectural structure. “Someone’s going to have to bend.”

(Updates with the election’s final seat count.)

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