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Press Conference by Prime Minister Junichiro Koizumi

[Upon inauguration of the reshuffled third Koizumi Cabinet]

October 31, 2005

[Opening Remarks by Prime Minister Koizumi]

Today, I have reshuffled the party executives of the Liberal Democratic Party (LDP) and the Cabinet. It was my intention to put the right person in the right post in today's reshuffle. My wish is to advance without stopping the reforms that have been implemented to date, further stabilize the foundation of the LDP-New Komeito Party coalition and continue the reforms on the basis of this solid foundation.

When I reshuffled the Cabinet last year, I called it the "Postal Privatization Implementation Cabinet." This time around, I would call it the "Reform Continuation Cabinet" if I were to give it a label. It is a Cabinet comprised of distinguished members who are both innovative and well qualified. I believe I have put the right person in the right post keeping the overall balance in mind. I would like to continue implementing the reforms with the cooperation of the people, accepting with due seriousness the mandate expressed by many that we should not stop reforms as well as the strong support that many people extended in the last general election. From my heart I would like to ask for the understanding and cooperation of the people of Japan.

[Q & A]

QUESTION 1: In this Cabinet reshuffle, I believe the appointment of Mr. Shinzo Abe as Chief Cabinet Secretary and the move of Mr. Heizo Takenaka to the post of Minister for Internal Affairs and Communications and Mr. Taro Aso to the post of Minister for Foreign Affairs are the focus of attention. Prime Minister, you have routinely said that the drive for reform and putting the right person in the right post are the criteria for determining where personnel are placed. Please explain in detail how you decided on this Cabinet lineup, particularly in regards to the three ministers.

PRIME MINISTER KOIZUMI: By the "three ministers" I assume you mean Mr. Abe, Mr. Aso and Mr. Takenaka.

In his capacity as Deputy Chief Cabinet Secretary, Mr. Abe has given me his utmost support behind the scenes ever since I was appointed Prime Minister. I saw the hard work he put in and that was why I appointed him as Secretary-General of the LDP. Mr. Abe's performance to date has led many people to have high expectations for his future. Mr. Abe moved from Secretary-General to Deputy Secretary-General-a move that political circles would commonly consider as a demotion-but he willingly accepted this demotion and supported Mr. Tsutomu Takebe, the Secretary-General, and strove to attend to party affairs and the election. From now, until the end of my term in September 2006, I thought that the post of Chief Cabinet Secretary would be right for Mr. Abe, in view of both for his future and for upholding the Koizumi Cabinet, as it would give him the chance to utilize his experience as a person who was responsible for the actual work of the Cabinet and LDP reform, during the turning point of the party as a whole. Chief Cabinet Secretary must coordinate the various ministries and agencies as well as both the LDP and New Komeito Party, and it is a very challenging position. Once he has gone through this experience, it will prove to be a great asset for him as a politician no matter what position he may hold in the future. In the world of politics defined by the "elderly, middle and young generations," Mr. Abe would still be considered part of the "young generation," too young in fact, but the post of Chief Cabinet Secretary is ideal for him to gain solid experience and to make continuous improvements. Based on his past experience, I believe that assuming this post is well within Mr. Abe's capacity.

I ran against Mr. Aso in the LDP presidential election as a presidential candidate. After I was appointed as Prime Minister, however, Mr. Aso served as Chairman of the Policy Research Council of the LDP as well as Minister for Internal Affairs and Communications. The Minister for Internal Affairs and Communications is a post that faces strong resistance from within the LDP with respect to the privatization of the postal services. Also, the Ministry's labor union is one of the most influential of the ministries' labor unions. Amid this environment, Mr. Aso has undertaken the difficult task of paying due consideration on my behalf.

Mr. Aso is also extremely well versed in diplomatic issues. He also has his own personal diplomatic network. We have had the opportunity to talk about diplomatic issues every now and then. Diplomacy in the days to come will be directly linked to domestic policy. You cannot separate diplomacy from domestic policy. Diplomatic negotiations are difficult unless one is familiar with domestic issues. Mr. Aso has served as Chairman of the LDP Policy Research Council as well as Minister for Internal Affairs and Communications, which are two of the most important posts in terms of domestic affairs. Based on the idea that a person who is knowledgeable about domestic policy should be in charge of diplomacy, I asked Mr. Aso to assume the post of Minister for Foreign Affairs.

Mr. Takenaka entered the political world in which he was unaccustomed to from the private sector and immediately became Minister of State for Economic and Fiscal Policy. Even though he was criticized as "how could an amateur from the private sector understand complex politics," from within the LDP, Mr. Takenaka firmly stood his ground and took on the role of promoting the Koizumi Cabinet's structural reform. I am sure that Mr. Takenaka must have been bewildered by some aspects of the political world when he entered it for the first time and that there were times when he suffered from criticism, but with his insights as an academic, he endured admirably. He has also gained the experience of election process when he ran as a candidate in the election of the House of Councillors, and was elected with the support of many people.

With the passage of the bill related to the privatization of the postal services, now is the most important time to successfully advance privatization and to promote structural reform. The Ministry of Internal Affairs and Communications is the government office in charge of the former Ministry of Posts and Telecommunications and the current Japan Post. It is also the government office that will be in charge of civil service reform that will be advanced as the structural reform is promoted in the future. The Ministry of Internal Affairs and Communications is also in a position to listen thoroughly to and respect the opinions of the localities based on the concept of "leave to the private sector what it can do" and "leave to the localities what they can do." Mr. Takenaka is a person who has endured criticism as the "private-sector academic that does not know politics," and is now formidable enough to sufficiently rival any experienced politician and is filled with the drive for reform. I asked him to serve as the Minister for Internal Affairs and Communications as he is capable of assuming the responsibilities of an extremely vital post.

QUESTION 2: You have just named your new Cabinet the "Reform Continuation Cabinet." Please share with us your thoughts on what you will establish as the priority issue of this Cabinet to accomplish, by the end of its term next September.

PRIME MINISTER KOIZUMI: There is a plethora of issues. Concerning what will be the priority issue, I believe that the people are most keenly interested in the social security issue which includes pension and medical care. I am sure that many people recognize that a sustainable social security system must be formulated. At the same time, people are asking, "how much benefit can we receive from the social security system," coupled with the issue of the balance between benefit and burden as in, "who will share the burden commensurate with the amount of benefit received."

While it is easy to simply talk about the benefit, it is the people that fund them. The question is how we will share the burden. It is vital that the government obtain the understanding and cooperation of many people regarding this issue, and thus it is most natural that the government attaches importance to this effort. One of the main focuses of the structural reform is, therefore, how to lighten the burden imposed on the people to gain their support. This is precisely the reason why we need to proceed under the policies of "leave to the private sector what it can do" and "leave to the localities what they can do." I have carried forward the reform package of three issues thus far based on this belief. Is it really necessary for the government to do this? Can this not be left up to the localities? Should government officials do what the private sector can do? It is with these questions in mind that I have advocated the policies of "leave to the private sector what it can do" and "leave to the localities what they can do." There is also the so-called reform package of three issues - the issue of subsidy, the issue of transferring tax resources to the localities, and the issue of reviewing the local allocation taxes - as well as the issue of whether the remuneration and personnel cost of civil servants are reasonable compared to that of the private sector.

When we consider the issue of safety and peace in Japan in connection with our future diplomatic issues, it is essential for Japan to remain as a peaceful and safe nation to realize any and all policies. I will aim to revive Japan as the safest country in the world. This is a public safety issue.

Regarding the defense issue, considering whether Japan will be able to maintain its independence and ensure peace on its own, we must promote various policies while securing peace and independence through working in alliance with the United States (US).

Both diplomatic and defense issues are extremely important. The Japan-US alliance is crucial in maintaining peace. In connection to this, there is the issue of how to deal with the burden in regards to the US military bases in Japan. No region wishes to shoulder the burden of hosting these bases. However, the majority of the people voice their desire for peace and safety. In the pursuit of both peace and safety, maintaining deterrence is extremely vital to prevent forces from trying to invade Japan or create chaos among the people of Japan or paralyze Japan. The Japan-US alliance is indispensable for Japan to maintain deterrence on a routine basis, which will prevent forces that intend to invade Japan from thinking, "let's give it a try," by ascertaining that if they do so they will incur a serious counterattack. There is also the diplomatic issue of how to maintain deterrence while reducing the burden of the military bases, in particular on Okinawa and other prefectures.

Japan must make every possible effort in order to build friendly relations with its neighboring countries, including China and the Republic of Korea (ROK), as well as realize international coordination with countries in Asia, Africa, the European Union (EU) and other countries around the world. The Japan-US alliance and international coordination are at the essence of a basic policy that has sustained the peace and prosperity of Japan for the past 60 years. Japan has stayed true to this basic policy. I believe that we must continue to pursue this policy and protect our peace and safety.

QUESTION 3: I believe you have been saying that you will appoint in your new Cabinet the so-called post-Koizumi candidates. Mr. Yasuo Fukuda, the former Chief Cabinet Secretary, who had been reported by the mass media to be a leading candidate, however, was not included this time. Please tell us why you came to this decision.

PRIME MINISTER KOIZUMI: I still consider the former Chief Cabinet Secretary Fukuda as one of the leading candidates. I do not believe that the future candidates for prime minister may only be chosen from among the Cabinet members or party executives. I myself did not hold any position prior to becoming the President of the LDP or the Prime Minister. I did not hold any of the top three party executive posts nor was I a member of the Cabinet. Still I am serving as the President of the LDP and the Prime Minister. Considering the balance within the party and the good variety of people there, I cannot include everyone in the Cabinet as the number of posts is limited. There are many people I wish to appoint as Cabinet members or to the posts of the top three party executives. This part of the Cabinet reshuffle always gives me a headache. For those who were not appointed as a party executive or a Cabinet member, there are a lot of opportunities within the LDP to exert their talent. I wish all of them good luck and ask that they give in their all.

QUESTION 4: On the issue of personnel. Prime Minister, this will be your last chance to choose your Cabinet members. With no more Cabinet reshuffles in sight, I believe it will be impossible to avoid losing some of the cohesion of your Cabinet during your limited remaining term. Will this Cabinet lineup allow you to avoid losing some of this cohesion? Do you really believe that the reform track will not be set back?

PRIME MINISTER KOIZUMI: Every time I reshuffle the Cabinet I have received criticism from a lot of people saying that it is the "beginning of the end." But in fact this has never been the case.. Even when I step down in September of next year, I do not believe that my successor as President of the LDP and Prime Minister would deviate from the reform track taken by the Koizumi Cabinet. Nor do I think that someone like that would be able to gain the support of the people. The people who have been appointed as party executives and Cabinet members this time around are all people who will set the Koizumi Cabinet's reform track up on course, not allowing it to backtrack nor allow it to stop, and who will proceed with reform. All of them are people overflowing with a drive for reform. I believe that even among those who did not join the Cabinet or assume the position of party executive this time around, there are many who share the same sentiment. Should I call it a competition for reform? The LDP, in addition to the New Komeito Party and the Democratic Party of Japan are attempting to engage in a competition for reform. The Cabinet and the LDP executives are not about to confront, but rather in light of the results of the general election both would be engaged in a competition for reform-and the people whom I have appointed to the top three party executive posts are all people who strongly hold this conviction. The people I chose to fill the top three party executive posts are all believers that the LDP must act firmly to put forward proposals for reform and compete for reform along with the Koizumi Cabinet to thereby support it.

QUESTION 5: The Japan-North Korea intergovernmental consultations will be resumed soon. Please tell us once again your commitment to resolving the abduction issue.

PRIME MINISTER KOIZUMI: From the day I flew to Pyongyang and met with General Secretary Kim Jong Il for the first time, I have committed myself to resolving the abduction issue based on a firm belief that this is an issue that must be resolved no matter what. The nuclear issue is given precedence on the agenda of the Six-Party Talks reflecting other countries' interest in this issue. To Japan, however, the nuclear and abduction issues are issues of equal importance.

Another round of the Six-Party Talks will be convened soon. Amid skepticism that the talks will be brought to a halt, North Korea and the parties concerned agree that this six-party framework must be effectively harnessed. It is also the intention of the Government of Japan to meaningfully take advantage of this forum. Furthermore, the abduction issue between Japan and North Korea is no less important than the nuclear issue. I believe it will become ever more necessary to strive to persistently and forcefully convey our basic policy that unless the nuclear and abduction issues are resolved, there can be no normalization of relations between Japan and North Korea.