Japan's ruling Democratic party of Japan (DPJ) and main opposition Liberal Democratic Party (LDP) on Thursday revealed their campaign platforms for July's upper house election, with both party's emphasizing fiscal discipline and reform.

The ruling DPJ in its manifesto pledged to achieve annual economic growth of more than 2 percent in real terms and launch a bipartisan overhaul of the tax system, hinting at the ruling party 's plans to raise the nation's five percent sales tax rate in the near future.

Koichiro Gemba, the party's policy chief, suggested the tax hike would not come before the fall of 2012 and Prime Minister Naoto Kan, also president of the DPJ, said Thursday consumption tax could be raised to as much as 10 percent.

The DPJ said the tax issue was something that needed to be "put right now" and the cross-party talks will be "aimed at reaching a conclusion at an early date" after the House of Councillors election on July 11.

Similarly, the LDP unveiled on Thursday their intention to raise the consumption tax to 10 percent to boost a current lack of funding for social welfare programs and both parties have pledged to halve the primary balance deficit by fiscal 2015 and achieve a surplus in the balance by fiscal 2020, without issuing new debt.

The DPJ laid out its target of achieving economic expansion of more than 2 percent on an inflation-adjusted basis and nominal gross-domestic-product expansion of an average of 3 percent annually by the fiscal year ending March 2021.

The government will "cooperate" with the central bank to reverse the country's lingering deflation issues according to the DPJ's platform.

For its part, the LDP announced it would aim to achieve nominal growth of 4 percent in the next three years and both parties plan to cut Japan's record-high corporate tax rate.

The LDP is proposing the effective rate of corporate tax be reduced to around the 20 percent range from 40 percent, whilst the DPJ didn't specify exactly how much they propose to reduce the rate by.

The DPJ's mantra of cutting wasteful spending on state and public projects was reiterated in its manifesto Thursday.

"We will further review the total budget allocation on both revenue and spending, by cutting more waste through reviewing public projects and making clear priorities of policies," the manifesto said.

Another campaign promise by the DPJ is to "make every effort" to keep next fiscal year's debt sales by the central government at this fiscal year's 44.3 trillion yen (484.46 billion U.S. dollars) -- a proposal which has been met with skepticism by some analysts.

To achieve such lofty goals the ruling party will reverse key pledges made in last year's general election such as plans to provide 26,000 yen in monthly child allowances for each child of junior high school age or younger.

In their new manifesto the DPJ said it will continue to provide the 13,000 yen allocation to families with children but look to expand the provisions and is considering increasing and improving child-care services as per the needs of particular regions and local communities, such as providing cheaper medical costs for children.

In terms of political reform, the DPJ said it plans to cut the number of Diet seats by 80 in the 480-member House of Representatives and by around 40 in the 242-seat upper house, whilst the LDP said it aims to reduce the total number of seats in the chambers by about 30 percent to 500 in six years' time.

As for foreign policy, the DPJ pledged to deepen the Japan-U.S. alliance and honor a commitment to relocate a controversial U.S. airbase within Okinawa prefecture.

Additionally the DPJ said it would seek to continue building a stronger relationship with China.

Voter support for the (DPJ) has rebounded since Prime Minister Naoto Kan took over from his unpopular predecessor Yukio Hatoyama, improving the party's chances at the polls.

The DPJ must win 60 of the 121 seats in the 242-member chamber to take a majority without relying on current or new coalition partners to pass bills smoothly in the upper house.

Kan has made reining in the public debt, already the biggest among advanced countries at about 200 percent of the country's GDP, a top priority and fiscal reform underpins the DPJ's election platform.

LDP leader Sadakazu Tanigaki, said Thursday that it is his party's mission to "break the majority control of the ruling parties," and said that the LDP will win "without fail."

In fact, Tanagaki has gone as far as to say he will step down as LDP party leader if his party fails to win a majority in the upper house.