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On December 26, 2018, Prime Minister Shinzo Abe attended the seventh Meeting of Councillors of Keidanren (Japan Business Federation) held in Tokyo.
 
The Prime Minister said in his address,
 
“Today, I am attending this meeting together with three ministers, including Deputy Prime Minister Aso. I would like to express my sincere gratitude for inviting me. This is the first Meeting of Councillors under the new leadership of Chairman Nakanishi and Chairman Koga. In my case, this is the sixth consecutive year for me to attend this meeting. This is also a testament of the Abe Cabinet’s unwavering commitment to give the highest priority to the economy. I am not sure if that is the case. As it has been introduced just before, the Meeting of Councillors has been held on December 26, the inauguration day of the second Abe Cabinet, for the third year in a row; I have construed that that is why it is that way. I am sure it is completely by chance. Anyway, today marks exactly the sixth year of Abenomics.
 
It is said that this month might mark the 73rd consecutive month of Japan’s economic recovery and it would match the longest period of postwar economic recovery. The longest postwar economic recovery to date was from February 2002 during the Koizumi Cabinet, lasting through the first Abe Cabinet until February 2008 of the Fukuda Cabinet. Despite being the longest postwar economic recovery, it does not have a name like ‘Jimmu boom’ or ‘Iwato boom’ as in past economic recoveries. I think, most of us cannot even recollect that the economic recovery had lasted that long. In reality, nominal GDP grew by only 2.5% in six years. In addition, the business sentiment varied significantly by region. According to the region-based business sentiment of the Short-Term Economic Survey of Enterprises in Japan (Tankan) of the Bank of Japan (BoJ), it was only in Kanto and Tokai that we saw a positive business sentiment where more enterprises perceived that the economy was good than bad. This business sentiment was negative throughout the six years in Hokkaido and Shikoku. It was an economic recovery centered on the manufacturing industry, which is an export industry. While the prolonged deflation was left unresolved and employment and wages did not increase adequately, these warm winds of economy recovery did not reach the service industry and micro, small, and medium-sized enterprises all throughout Japan. This is the biggest regret from the economic policy of the first Abe Cabinet. In the last six years, however, nominal GDP has grown by 10.9%, more than four times compared to previously. The number of jobs has also risen by nearly four times, or over 3.7 million, on a quarterly basis. Above all, thanks to the efforts made by all of you, wages have increased to the highest level in this century for five consecutive years. We swiftly created a non-deflationary condition by releasing a set of three arrows, based on our reflection from the first Abe Cabinet, and launched a robust, virtuous economic cycle. Firmly supported by domestic demand, the ratio of active job openings to applicants has exceeded 1.0 for all 47 prefectures for the first time in history, and the winds of economic recovery now reach service industries and micro, small, and medium-sized enterprises in the regions. In fact, there are very little regional differences in the latest economic recovery. According to the region-based business sentiment of the BoJ’s Tankan, business sentiment consistently remained positive for five years in all nine regions of Japan, from Hokkaido down to Kyushu and Okinawa. Another large factor behind this was the expansion of ‘inbound consumption.’ The number of foreign tourists to Japan has set a new record and has surpassed 30 million this year. The overseas travel balance* has been in a deficit for more than 40 years on a monthly basis since the Osaka World Expo in 1970. While the balance was constantly in a deficit for 40 years, it has shifted to a surplus of 2 trillion yen last fiscal year. The Japanese economy in the Heisei period experienced the collapse of the bubble economy and the lost two decades, suffering from a deflation with no exit in sight. Even under such circumstances, we were able to structurally transform our economy from one that was solely dependent on the trade of goods, to one that also takes advantage of soft power, such as regional tourism resources and culinary culture, while ultimately stimulating domestic demand by creating a virtuous economic cycle. I believe we now have a ‘muscular’ economy that is more resilient to external shocks. While the Government does not comment on the level of stock prices, we can clearly state that the fundamentals of Japan’s economy are strong, amidst growing concerns over the outlook of the world economy. Furthermore, our task is clear. We must ‘train” our economy to make it an even more ‘muscular’ and thriving economy. That is the only way. We will make even greater efforts to implement the Growth Strategy, which aims for the realization of Society 5.0. We will pioneer the productivity revolution ahead of the world and transform this virtuous economy cycle into one that is even more robust.
 
Our lives have changed significantly over the 30 years of the Heisei period. In the first year of the Heisei period, ‘Pocket bell’ pagers were at the peak of their boom while mobile phones were ‘shoulder phones’ as large as a shoulder bag. They have been replaced with smartphones. We now live in an era in which a device comparable to a supercomputer of 30 years ago fits into our pockets. We were not able to even imagine the development of the Internet and social media 30 years ago. Today, YouTuber ranks among the top ten dream occupations of elementary school students. Individuals can send out messages to the world and be connected directly to the world. New possibilities are indeed emerging as we head towards Society 5.0. During the Heisei period, people’s work styles have significantly changed. As you likely recall, a top-selling product in the first year of the Heisei period was an energy drink that became famous for its TV commercial with the ‘Can you fight for 24 hours’ slogan. This room is probably full of people who were corporate fighters 30 years ago—maybe not corporate fighters but supervisors who rigorously commanded the corporate fighters. In the Heisei period, a five-day workweek was introduced; the monthly work hours decreased by 26 hours, which represents a 15% reduction. Meanwhile, per capita GDP increased by 25% or 850,000 yen in 30 years. This is the result of our efforts to steadily increase productivity. When Mr. Konosuke Matsushita (founder of Panasonic) introduced a five-day workweek practice, he reportedly said that one of the two remaining days of the week was for self-invigoration and the other day for self-cultivation. It is important to create time for refreshing one’s mind and for improving yourself. If life becomes more fulfilling, then productivity will no doubt increase. This year, the work style reform bills were enacted. They will correct the practice of working long hours and introduce equal pay for equal work. They constitute the first major reforms in 70 years. All people, including women and men, the elderly and the young, as well as people with disabilities and those suffering from intractable diseases, can work according to their lifestyles and find their work rewarding. As we enter the next period after Heisei, the Government will work together with everyone here to press forward with the work style reforms with a view to realizing a society in which all citizens are dynamically engaged.
 
Next year, we will see the historic succession to the Imperial throne. I am determined that we must make next year a year in which we pave the way to a new era for Japan. The Trans-Pacific Partnership (TPP) 11 (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) will enter into force in four days. The Economic Partnership Agreement (EPA) between Japan and the European Union will also enter into force in February of next year. As a standard bearer for free trade, Japan will continue to advance a free, fair, and rules-based economic zone to the wider world. Amidst the rapidly declining birthrate and aging population, we need to urgently reform the employment system, setting our sights on a 100-year life society. Japan’s social security system must be reformed to a system that can bring peace of mind to all generations. With the cooperation of the business community, tuition-free early childhood education is set to be introduced in October. From April of next year, we will also make tuition fees free for higher education for those children who are truly in need. They constitute the first major reforms since tuition-free basic education was introduced after the end of World War II. The Abe Cabinet will boldly invest in the future of our children.
 
The source of funding for these initiatives, the consumption tax, will be increased to 10% in October of next year. The previous increase to 8% had significant impacts on the economy. Learning greatly from this experience, this time we have included temporary special measures and bold tax reduction measures in next year’s budget, in addition to the second supplementary budget. The Government has prepared a more than full set of countermeasures in response to the consumption tax increase, of a level that returns all of the incremental revenue from the consumption tax increase to the people. I would like to ask for the cooperation of the business community in this endeavor. And now onto what you may have been expecting—Chairman Nakanishi and everyone in attendance, I would like to ask that wages be increased to make the economic recovery trend even more certain. Continuing in the vein of my earlier remarks, I am only mentioning this for your reference; the rate of wage increase in the first year of the Heisei period was apparently about twice as high as this year’s level. I can see the reaction gradually becoming mixed and perhaps I should refrain from saying the exact percentage. For your reference, it was 5%. It was just for your reference.
 
This year, Japan won its bid to host the World Expo 2025. I express my gratitude to all of you for your cooperation.. We now have a major target for the future, following the 2020 Tokyo Olympic and Paralympic Games. When I was a child, I saw the 1964 Tokyo Olympics and the 1970 Osaka World Expo firsthand. I remember thinking Japan was now part of the global community. As we are at another turning point in our history, I would like to create with all of you a dynamic era in which our children, our next generation, will feel strong power in their bodies in their journey to the future, using 2020 and 2025 as momentum. I am looking forward to working together with you next year as well. I would like to close my remarks by wishing everyone a wonderful new year. Thank you very much.”   
 
*The balance of spending by foreign tourists in Japan and spending by Japanese nationals overseas