CHISA FUJIOKA Prime Minister Yukio Hatoyama has stamped out a Cabinet rift over the privatisation of Japans postal system in a bid to deflect voter criticism of weak leadership, but the move may do little to lift support ahead of an election. Hatoyamas Democratic Party needs to win a majority in the upper house vote expected in July to avoid policy deadlock that could get in the way of efforts to beat deflation and strengthen a fragile economic recovery. The public support for his six-month old government has fallen to less than half the figure when it first took power, raising the risk that the Democrats will need to maintain their current coalition with two tiny parties with whom they differ on policies. With support down on voter perceptions of Hatoyamas inability to make tough decisions, the premier stressed that he himself had resolved the squabble within his government over the future of postal service operator Japan Post. But critics said Hatoyama had simply caved in to the demands by his outspoken Banking Minister Shizuka Kamei, the head of a tiny party Peoples New Party (PNP) in his coalition government that the Democrats must rely on to pass the bills smoothly in Parliament. This outcome is very negative for the Democratic Party, said Yoshiaki Kobayashi, political science professor at Keio University. It wouldve been fine if the postal plan had been drawn up by Cabinet ministers, but since Kamei announced his own plans first, it just gives the impression that the Democrats are being pushed around by Kamei, stressed the professor. Kamei had unveiled a proposal last week on how to scale back the privatisation of Japan Post, which has retail banking and insurance services making it the worlds largest financial conglomerate with financial assets of about 300 trillion yen ($3.2 trillion). Several Cabinet ministers had opposed to the plan, however, including Kameis proposal to raise the entitys limit on bank deposits, a move that could trigger an inflow of deposits into its banking service from private banks. Kamei is keen to appeal to post office chiefs - a key support group - ahead of the upper house election. His party, the PNP, began as a group of lawmakers opposed to postal privatisation. Moreover, the Chief Cabinet Secretary, Hirofumi Hirano, tried to play down concerns that Hatoyama had allowed his tiny coalition partner to have too much say in policy-making. The entire Cabinet left the decision up to the prime minister and he made that decision promptly, Hirano recently told a news conference. However, some people are saying Mr Kamei forced this through, but that is not the case. Japan Post, which provides postal, banking and insurance services, holds about a third of the 700 trillion yen government bond market and some analysts say a doubling of deposits under the privatisation plan could see it buying more bonds. That could provide a crutch for a government that issued a record amount of new bonds in the financial year to the end of March and which faces a public debt burden running close to 200 percent of GDP, the highest in the developed world. The latest bickering among Cabinet ministers could add to worries among voters and investors on how decisions were being made in Hatoyamas government, which had promised to make policy-making more efficient and transparent when it took power last year. Kobayashi said policies risked being swayed by individual ministers, despite the Democrats plans to centralise decision-making in a strategy bureau and debate key policies in meetings with all related ministers. It hasnt been clear to voters how policies are being formed in the coalition government, said Kobayashi. He added: Perhaps the policy-making process hasnt been thought out yet and this is worrisome. Kuwait Times