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Press Conference by Prime Minister Junichiro Koizumi

September 21, 2005

[Opening Remarks by Prime Minister Koizumi]

I have been entrusted with the great responsibility of the post of Prime Minister for the third time as a result of my appointment as head of the Cabinet at today's plenary session of the House of Representatives. I ask for your support and cooperation in this endeavor. Based on the stable foundation by the coalition between the Liberal Democratic Party (LDP) and New Komeito Party I will firmly maintain the structural reform on the track that I have advanced thus far.

Till now I have advanced reform with the support of many people. I interpret the results of this election as the mandate expressed by the people of Japan to "continue advancing structural reform." I intend to firmly advance structural reform without stopping, backed by the support and cooperation of many people, and I ask for your understanding in this regard.

[Q & A]

QUESTION 1: The third Koizumi Cabinet will be inaugurated today. Prime Minister Koizumi, your term lasts another year until September 2006. I believe that in this one-year period you will try to bring the Koizumi reforms to fruition. In your recent press conference as president of the LDP, however, you said that there was a plethora of domestic and foreign challenges that needed to be addressed. During this year, what will be your top priority and how will you chart the course of running the administration? Please elaborate on both the domestic and diplomatic aspects.

PRIME MINISTER KOIZUMI: First of all, in this special Diet session that was convened today, I would like to enact the bills related to the privatization of the postal services which were dropped at the last Diet session. After that, I will advance the reform package of the three issues on subsidy, local allocation tax and transfer of tax sources concerning local government reform, based on the policies of "leave to the private sector what it can do" and "leave to the localities what they can do," which have been underscored in the previous "Basic Policies for Economic and Fiscal Management and Structural Reform." In formulating the budget toward the end of the year, we must get down to the details of reducing subsidies by four trillion yen, transferring roughly three trillion yen in tax sources and reviewing the local allocation tax.

I will continue to tackle the issue of reducing the number of civil servants and total personnel costs involving civil servants. As soon as this Diet session is over, the budget formulation for next fiscal year will start. Specific figures will be generated at that time. Since this will be the last time that I, or the Koizumi administration for that matter, will formulate a budget, it will be an extremely important budget formulation. The existing reform track, or the stance of "no growth without reform," aims to invigorate the business climate and economy without relying on public spending. A course must be defined that will prevent any backtracking of this reform.

On the diplomatic front, we did not see the reform of the United Nations (UN) and other matters become a reality at this session of the UN General Assembly. Based on the lessons we have learned by cooperating with other countries so far, I believe we must spearhead efforts toward reform that will allow us to move forward even in some small way with the aim of creating a stronger UN.

Counterterrorism is an issue that the international community is most concerned about and requires the cooperation of many countries. Therefore, I believe we must cooperate with regard to counterterrorism, bearing in mind how Japan can fulfill its responsibility as a member of the international community.

There is also the issue of humanitarian and reconstruction assistance to the people of Iraq. Regarding the issue of North Korea, we reached an agreement at the Six-Party Talks, but a great many issues remain as to how this agreement can be put into effect. The Six-Party Talks will be held again in November. From now until then, we must make progress in negotiations and dialogue on how we can resolve the outstanding bilateral issues between Japan and North Korea.

Taking all of this into consideration, there is indeed a plethora of domestic and diplomatic issues. I will work hard to fulfill my duties as Prime Minister in the year I have left of my term.

QUESTION 2: In today's election at the plenary session of the House of Representatives to designate the Prime Minister, over 10 rebellious Diet members who were elected as independents voted for you. Among them, there are some Diet members who have expressed their intention to support the bill related to the privatization of the postal services. Please tell us how you regard this and how this response will affect the content of the disciplinary measures within the LDP that is expected to take place in the days to come.

PRIME MINISTER KOIZUMI: I am grateful that a fair number of independents designated me as head of the Cabinet. I believe that looking at the election results, even those who opposed the bills related to the privatization of the postal services have recognized that the people were in favor of privatization. To honor public opinion, we will resubmit the bill related to the privatization of the postal services without changing its content in the coming Diet deliberations. I believe that some Diet members who opposed the bill related to the privatization of the postal services in the previous Diet session will now support it in order to respect the will of the people, bearing in mind that "my way of thinking until now was not in line with the public's way of thinking." As for how these Diet members will be handled, I believe that the party executive will give consideration to this matter in close consultation with the House of Councilors after looking at the outcomes and the deliberations on the bill. I think that is too early to determine what kind of measures will be taken at this point in time. Furthermore, I believe differences will arise depending on the individual, and whether they belong to the House of Representatives or the House of Councilors. I think the party executive will make judgments concerning disciplinary measures while listening to the opinions of the Party Ethics Committee and in view of future deliberations and how the individual in question responds. At this point in time, I do not think we are at a stage where we can say, what we should do about this person or another.

QUESTION 3: Many new people won seats in the House of Representatives in this election. Do you intend to appoint any of the new Diet members as ministers or vice-ministers when you reshuffle your Cabinet?

PRIME MINISTER KOIZUMI: We must first make every effort in the deliberations at this Diet session. I believe the ensuing personnel matters are issues that must be decided in view of both the House of Representatives and House of Councilors after the Diet session is over.

QUESTION 4: Forty-three-year-old Seiji Maehara was newly appointed as President of the Democratic Party of Japan (DPJ) after the election. Are you looking for the same qualities that DPJ President Maehara is using to his advantage-in other words, "youth" and "freshness"-in a candidate to succeed you in the so-called "post-Koizumi era?"

PRIME MINISTER KOIZUMI: Mr. Maehara became the new DPJ President and he is 43 years old. He is 20 years my junior, and I think that he has introduced some fresh air into the political world. I know from past discussions that Mr. Maehara is a very earnest, ambitious Diet member. I think that Mr. Maehara's appointment will not only make the DPJ rejuvenate itself, but also have the effect of alerting the entire political world in a positive way about the need for a breath of fresh air and rejuvenation.

As I said, I think Mr. Maehara becoming the DPJ President will not only revive his party, but will also have a significant impact on the LDP in the days to come. Depending on Mr. Maehara's achievements, I think a sense of expectation among the people will override their anxiety about his young age. I hope Mr. Maehara will flourish in this way.

I think there are many aspects on which the LDP and DPJ can cooperate with each other, based on Mr. Maehara`s thinking and what I have heard in discussions with him. As he is calling for a change in political administration, it is fine to accentuate the differences between the LDP and DPJ, but I think it is necessary to highlight the points of similarity and stability as well. I feel that Mr. Maehara is the type of person who would take this kind of approach.

QUESTION 5: Prime Minister Koizumi, you mentioned previously the reform package of the three issues and reform of the civil service. Both of these are thorny issues, raising confrontation between national and local governments or among ministries as each seeks out their own interests. Is it your intention to resolve such difficult issues in the one year that remains of your term, or is it your intention to merely present a direction for these reforms?

PRIME MINISTER KOIZUMI: There has already been stiff resistance to the reforms I have advanced to date. Reform of the highway-related public corporations, the privatization of the postal services and regulatory reform are all issues that have faced fierce opposition not only from various ministries, but also from Diet members. With regard to the reform package of the three issues that you just mentioned, a basic policy was issued last year and there has been strong resistance and opposition to it. Despite such resistance, however, I will continue to proceed with reforms in accordance with the basic policy. Resistance may be strong. While fully recognizing such resistance, I have been advancing reforms because they are necessary. I intend to continue along the path laid out in the basic policy. On top of that, it does not mean that just by accomplishing one thing all reforms will come to an end. As there is no end to the reform, there is no stopping. I believe a foundation on which my successor can advance reforms must be created.

QUESTION 6: You have mentioned the issue of reform of personnel costs involving civil servants, and there are other issues, including the reform of government-related financial organizations which you did not cover today. These issues are being discussed in the meetings of the Council on Economic and Fiscal Policy, with a view to issuing policies or guidelines this autumn. You have just stated that resistance among the ministries to such reform is still strong. Could you tell us specifically how you intend to demonstrate leadership as Prime Minister and proceed with reforms?

PRIME MINISTER KOIZUMI: Prime Minister Koizumi: My stance remains unchanged in that I will continue to proceed as I always have. Resistance to these issues always exists. I have been criticized either as a dictator, or at the other extreme for leaving all decision-making to others. The fact is that the basic policy has remained unchanged from four years ago. The question is how I realize the things I said four years ago. Take salaries of civil servants for example. Even if we were to set the salary in conformity to private sector standards, it is the case that in the private sector too, standards differ between urban and rural corporations. How we respond to such differences remains an issue.

With regard to the issue of government-related financial organizations too, ministries have been resistant to abolishment and consolidation or privatization efforts, insisting that they need such organizations. In an environment in which private sector-led economic trends have become so strong, I believe that it is necessary to adopt a financial system that does not hinder the vitality of the private sector and that will suit the new age. In that sense, although I have only one year remaining, it is my intention to announce a definite policy towards the abolishment and consolidation and privatization of government-related financial organizations, and see to it that reforms are put on track, whoever my successor turns out to be.

QUESTION 7: I would like to ask what your take is on Mr. Seiji Maehara, the new President of the DPJ. It seems that, not only Mr. Maehara, but the new executive of the DPJ have significantly broadened their ground for discussion with the LDP concerning such issues as the Constitution, diplomacy and security. You have mentioned a change in political administration, but when considering political realignment both during and after your term, including partial partnerships for individual bills, how do you expect the relationship between the DPJ executive under Mr. Maehara, and the LDP to develop?

PRIME MINISTER KOIZUMI: I believe that the future prospect of the issue of political realignment is difficult to perceive. Some people claim that, "The opposition party, as the second party, must differentiate itself from the LDP as Japan is now a two-party system." However, I believe that the differences between the two leading parties in countries which practice a two-party system are conversely being ironed out. If the two parties must be differentiated in some way, it is indeed best for the DPJ to transform back into the old Socialist Party. If this happened, however, would people then believe that an opposition party which is truly capable of changing the political administration would have been formed? I am doubtful of this theory.

The media, without any delay, criticizes the DPJ when it is cooperative with the ruling party, branding them as the "second LDP." I do not believe that it is quite right. As saying goes "agree where you can and oppose where can't agree", I believe there are many areas in which the current DPJ and the LDP may cooperate. I am not going to give any specific example, but I believe that there are a number of areas in which they choose not to cooperate when in fact they actually could, due to this fear of being called a "second LDP."

It is precisely because we follow a two-party system that it becomes harder for the opposition party to come to power unless it steps closer to the ruling party. The United Kingdom, Germany and the United States all practice a two-party system. When taking a look at these two-party system countries, there are not many differences between the ruling and opposition parties. I suppose that this is in fact the reason why a change in political administration takes place. The people will think that change in political administration is impossible if the opposition party today turns into the former Socialist Party by saying, "We must differentiate ourselves from the ruling party" and "We oppose the move simply because it was proposed by the ruling party." I believe that this is the challenge faced by the DPJ, the largest opposition party in Japan. I will pay close attention with great interest to the moves made by the new DPJ under President Maehara to see how it will differentiate itself from the LDP while cooperating and whether they are capable of formulating a policy that would not arouse concern among the people even if they were to gain the reins of government. I intend to cooperate fully with the DPJ in areas in which we are able to work together.