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Speeches and Statements by Prime Minister Junichiro Koizumi

(Provisional translation)

General Policy Speech by Prime Minister Junichiro Koizumi to the 164th Session of the Diet

January 20, 2006


Over the course of four years and nine months since my appointment as Prime Minister, I have wholeheartedly pursued structural reform under the consistent policy of "without reform there will be no growth" in order to revive Japan and create a society full of confidence and pride.

During this time, my efforts to materialize reform unleashed criticisms such as "without growth there will be no reform," "advancing disposal of non-performing loans will worsen the economy" and "without fiscal expenditure the economy will not recover." When I disclosed my intention to privatize the four highway public corporations critics said that was "impossible," and the privatization of the postal services was even branded as a "ridiculous idea."

Amid the spate of criticisms, we have achieved our set target in the disposal of non-performing loans and the Japanese economy is moving along the recovery track led by the private sector without relying on government fiscal expenditure, as a result of firm and steadily advancement of the reform. The highway tolls have been reduced for the first time at the time of the privatization of the highway public corporations. The bill related to the privatization of the postal services was first defeated at the Diet but was finally adopted as the people deemed postal privatization to be a "sound idea."

In advancing reform, people agree to the general principle but disagree once they get down to the details, and friction and confrontation occur with the forces that wish to maintain the current practice. Politics should not attach priority to the benefits of a small minority and instead should aim for the benefit of the nation as a whole. This was clearly reflected in the judgment the people made at the last general election, at which the privatization of the postal services was at stake. It was precisely the understanding and support of the people which enabled us to steadily advance reform to date.

Today, motivation to take on the challenge of a new era and confidence in the belief that "if you do it, it will happen" are finally emerging in Japanese society, and the buds of reform are starting to grow into a large tree. We should never stop or slow down the reform. Taking the realization of the privatization of the postal services as an impetus, I will continue with my reform efforts and realize a simple yet efficient government based on the stable foundation of the coalition between the Liberal Democratic Party (LDP) and the New Komeito.

(Realization of a Simple yet Efficient Government)

Drastic reduction in the size of the government may only be made possible through reduction in the total personnel cost of civil servants both in the central and local governments, reforms of government-related financial organizations and incorporated administrative agencies, review of the management of government assets and debts, and realignment and streamlining of the special accounts. The Government will submit a bill promoting administrative reform that stipulates the basic policy for the aforementioned reforms and make every effort to obtain the approval of the Diet.

The Government will reduce the total personnel cost of civil servants and the number of civil servants, which currently stands at 690,000will be cut by over five percent in the next five years. The Government will also drastically revise the seniority-based remuneration system and review the system so that the level of remuneration will reflect the current status of remuneration in the private sector.

In the reform of government-related financial organizations, the Government will strictly follow the principle that it should supplement the private sector. It will integrate, abolish or fully privatize eight organizations while limiting the functions to be kept to three areas: assistance for fund procurement by micro, small- and medium-sized enterprises as well as by individuals; financing that is essential for acquisition of important overseas resources as well as for securing international competitiveness; and yen loans.

The Government will advance sales and lending to the private sector of state-owned assets such as government buildings and lodgings for their effective use.

The Government will review the tax revenues earmarked for road projects on the premise of the widening the use of tax revenues while maintaining the current tax rate.

We will breakaway from the conventional idea that public works and interests may be pursued only by the government and is difficult for the private sector, accelerating the move "from the public sector to the private sector" in areas where the private sector will perform more effectively than the government.

The aim of the Market Testing is to provide better services through competition between the public and private sectors. Over 120 companies made bids for this Market Testing in three areas: employment assistance provided by the public employment office; collection of national pension premiums by the Social Insurance Agency; and security service in prison perimeters. The Government will submit a bill for the full-scale implementation of Market Testing and endeavor to expand the scope of Market Testing to include such areas as over-the-counter services for copies of resident registers and family registers as well as statistical services.

The Government will fundamentally reexamine the public-interest corporations system for the first time in a century since the Meiji Era and submit to the Diet a bill which stipulates the abolishment of the need to gain government approval to establish such corporations and instead allow their establishment by registration.

While seriously taking the local governments' opinions into account, the Government will transfer 3.0 trillion yen in tax resources, review the local allocation tax and reform subsidy by 4.7 trillion yen, under the policy of "from the state to the regions."

The 3,200 municipalities will be merged into 1,800 by the end of this fiscal year. Accordingly, the number of members of local assemblies will be reduced by 18,000 people. While continuing the promotion of mergers of municipalities, the Government will provide assistance so that Hokkaido will become a model case of the Do-Shu local administration system.

The Government has reduced the level of general expenditure in the FY2006 budget to below the FY2005 level and the amount of new issuance of government bonds to below 30 trillion yen. Based on the economic situation, the Government will abolish the fixed-rate tax reductions that were introduced as part of the government's economy-boosting policy. The Government will identify options and the process on the direction of the fiscal structural reform from both the aspect of expenditure and revenue by around this June, thereby securing the reform track. It will review the entire tax system from every angle including consumption tax, income tax, corporate tax and property tax, while advancing discussions across the country to realize a tax system appropriate for a fair and vivid society.

(Economic Vitalization)

Now that the total amount of outstanding non-performing loans held by the major banks has been reduced by 20 trillion yen in the past three and a half years and the financial system stabilized, the Government will advance the flow "from savings to investment" and come up with legislation so that people may utilize various financial products and services without concern.

I am certain each town and village has a unique charm of its own. The Government will draw on the latent potentials of each community and support their motivation to become the "first-rate rural areas" and "first-rate cities" in Japan and even in the world.

The number of special zones for structural reform has already exceeded 700. In the first approved special zone, Himeji City, it is no longer necessary to gain the approval of the government to conduct projects to recycle disposed tires. The city is now becoming the center of the environmental and recycling industry. In addition, the Government has nationally extended the scope of 53 exceptional measures for deregulation, such as integrated operation of kindergartens and day-care centers.

The number of foreign visitors to Japan, which stood at five million people three years ago, is now close to reaching seven million. This is in part due to the fact that last year Japan hosted the EXPO 2005 Aichi, Japan and implemented the measure to exempt visa requirements for people from the Republic of Korea (ROK) and Taiwan. The Government will aim to achieve the target number of ten million foreign visitors to Japan by 2010 through such programs as the Visit Japan Campaign.

The plan to double the amount of foreign investment to Japan has being steadily advanced. Foreign investment leads to regional vitalization and expansion of employment opportunity, as well as new stimulus to local technology. That is why Japan welcomes such investment, including investment from an Australian company in Hokkaido that started a resort business for ski tourists and a US company that established a research and development base for digital consumer electronics in Japan. The Government intends to promote further investment with even grander targets.

The Government will put a stop to the hollowing out of the city centers and reconstruct elderly-friendly, lively cities.

The small- and medium-sized enterprises (SMEs) which support the foundation of manufacturing with their high-level technologies are essential for the creation of new industries. A small factory of six employees located in Sumida Ward, Tokyo develops painless syringe needles. The needles are painless because it has reduced the diameter of the needle at its tip down to several microns, and the factory is called the "manufacturers' savior that makes possible the impossible." The Government will back up motivated SMEs through provision of assistance in securing and nurturing human resources with creative skills as well as their challenge for starting new businesses. It will also lay out by this summer the modality of a new development strategy, which will aim to enhance international competitiveness, improve productivity, and vitalize the regional economy, among other endeavors.

Japanese agricultural and fisheries products, such as apples, strawberries, Chinese yams, Koshihikari rice and abalones, are sold as luxury foods overseas given the global boom for Japanese food and improvement in the living standards of Asian countries. Companies processing scallop products in Hokkaido and Aomori Prefecture have passed the European Union's (EU) strict tests for sanitation control after trying for more than five years, and have started to export their products and are now expanding their export channels to the United States (US) and the ROK. The Government will prioritize its assistance to motivated and skillful management and advance an "offensive agricultural policy."

The Government will take rigorous measures against violations based on the revised Anti-Monopoly Law in order to secure fair market competition.

(Securing Reassurance in People's Daily Life)

In order to enhance the current social security system into one that will withstand in the future, the Government will review the overall social security system including the modality of benefits and burdens. Following-up on the reform of the pension and long-term care systems, the Government will advance the reform of the medical care system this year.

The Government will endeavor to place priority on prevention of illness and work to determine the appropriate level of medical costs to create a patient-oriented sustainable medical care system while maintaining the universal health insurance coverage. It will also review the financial burden imposed on elderly patients and lower the medical treatment fees. The Government will aim to establish a new system which will distribute the burden of medical costs of the elderly aged 75 and above, equally among all generations and reorganize and combine individual insurers on prefectural bases.

The Government will strongly promote measures to deal with nonpayment of national pension premiums and nonparticipation in the system in order to attain the people's trust in the pension system. The Social Insurance Agency will restart its service, taking steps towards its dissolution with the separation of the management of the pension and medical insurance systems, establishing separate organizations for each of these systems. Furthermore, the Government will unify the employees' pension plan and the mutual aid pension.

The number of births fell below 1.1 million last year, and it is expected that the population will decrease for the first time since the end of the Second World War. We must reverse the trend of the declining birthrate. As I have pledged at the time of my appointment as Prime Minister, the Government has increased the number of children accepted at day-care centers by 150,000 as of the end of last fiscal year. This number, however, is still insufficient. In light of this situation, the Government will continue to promote the "Zero Waiting for Day Care Program." We met the target goal to develop in 15,000 after-school hours' children's club where primary school pupils may spend their time with peace of mind until their parents return from work. Moreover, the Government will come up with various measures for after-school children by borrowing the help of retirees with abundant experiences and of communities. The Government will expand the child-support allowance in order to reduce the financial burden during child raising and develop an environment in which people may continue to work while experiencing the joys of child raising. As part of such efforts the Government will promote detailed child raising assistances provided by companies and communities including spreading the use of the child-care leave system for worker.

This fiscal year, the Government achieved its goal to have 30 percent representation of female members in advisory councils and other committees. Aiming to make females represented in 30 per cent of leading positions in all areas of society by 2020, the Government will promote the Basic Plan for Gender Equality which was revised at the end of last year. The Plan includes providing assistance in seeking work for females who have left the job market due to marriage or child raising.

In order to promptly deal with the issue of asbestos which has caused many health hazards, the Government will submit a bill to aid the victims of asbestos who cannot receive compensation under the existing system. It will also endeavor to prevent the spread of health hazards through early and safe removal of asbestos and other measures.

With regard to the threat of avian influenza, the Government will extend international assistance through financial cooperation and dispatch of experts, as well as through stockpiling of therapeutic drugs, and the development and supply of vaccines.

Based on scientific grounds, the Government resumed the imports of US beef in December last year. The Government will ensure food safety and reassurance from the standpoint of the consumers.

The Government will establish a Japan Legal Support Center this spring, which will start providing its services nationwide this autumn. The Government will realize a judicial system both close and answerable to the public so as to allow people to casually seek legal advices from anywhere in Japan.

(Securing the Safety of People)

The revival of "Japan, the safest country in the world" will remain the most important challenge for the Cabinet.

The number of "empty Kobans" (police boxes), which had stood at 2,000 in April 2004, has been reduced in the space of one year by 700. Over the course of three years between then until the spring of 2007, the Government aims to further reduce the number of empty Kobans to zero. There are many cases of people who have perpetrated crimes, committing further offenses. The Government will construct an even closer system of cooperation between related organizations, which will include the sharing of information, with the aim of preventing repeat offenses.

In order to address the issue of the increasing number of crimes committed by foreigners, through strengthening cooperation between the police and the immigration authorities, the Government aims to halve the number of foreigners living illegally in Japan by 2008, which is currently estimated at around 250,000. The issue will also be addressed through the introduction of fingerprint screening at immigration.

In an effort to prevent terrorist attacks, the Government will thoroughly implement a variety of measures including information gathering and analysis, as well as surveillance and heightened security at important facilities and on public transport.

In city-center entertainment districts such as Kabuki-cho in Shinjuku, and also in ordinary residential districts across the nation, local residents are actively taking part in crime prevention activities. The number of anticrime volunteer groups, which stood at 3,000 two years ago, is now up to14, 000. And the total number of people carrying out voluntary patrols is on the order of 800,000. In order to protect small children from becoming victims of crime, the Government will proceed with the reinforcement of security during children's commute to and from school, and with the sharing of information on suspicious individuals through cooperation not only with the police and schools, but also with PTAs and local residents.

In keeping with the Basic Plan decided at the end of last year, the Government will support crime victims and their families so that they can make an early recovery and live with a sense of reassurance.

The number of fatalities from traffic accidents in Japan, which at one time reached 17,000 annually, declined to less than 7,000 for the first time in half a century last year. The Government will continue to proceed with road safety measures with the aim of further reducing the number of traffic accident fatalities to less than 5,000 per year. Moreover, it will promote the creation of a safety management system for public transport as well.

Since the beginning of last month, there has been widespread damage as a result of a cold wave and accompanying heavy snowfall. The Government will take all possible measures to support the lives of people affected by the severe weather, such as removing snow from the roofs of private residences, strengthening avalanche watches, ensuring the flow of transportation and the stable supply of electricity, food and petroleum products.

The incident concerning the falsification of earthquake-resistance data for buildings has undermined public trust in what lies at the foundation of our livelihoods: our homes. The Government will do everything in its power to ensure the safety of residences with a top priority placed on ensuring the safety of residents of apartment buildings and of other nearby buildings. To eliminate the anxieties surrounding this issue, the Government will devote its energies to determining the actual situation, examining the building inspection system which failed to detect the falsification of documents, implementing measures to prevent a recurrence, and instituting promotion of earthquake-resistance measures.

(Improving and Harnessing "Human Resources")

The main pillar that supports the future of Japan is its people. In order to prevent the occurrence of a situation in which we are "affluent in terms of material but poor in spirit," we have to nurture people with the toughness and richness of mind that can open up the new era.

Based on nationwide discussions, the Government will vigorously tackle the issue of the Fundamental Law of Education with the aim to revise the law promptly.

In recognition of the importance of "raising healthy children in society," in cooperation with schools as well as with families and local communities, the Government will teach children to appreciate the preciousness of life and the importance of contributing to society through hands-on activities and interactive exchanges, promoting children's consciousness of morals and rules.

Healthy eating is essential to nurturing richness of mind and soundness of body. With the formulation of the Basic Plan for the Promotion of Food Education, the Government will promote food education as a national movement that will include the popularization of Japanese food culture and the promotion of school meals made using locally grown food materials, in addition to the improvement of diet.

While promoting initiatives among teachers and schools, the Government will attempt to improve the quality of education by providing differentiated guidance according to the student's level of proficiency, third-party evaluations of schools, the participation of parents, guardians and local residents in the operation of schools, and by spreading parental school selection system.

The Government will endeavor to foster nation's top athletes, who give dreams and excitement to the people, and will create an environment in which the people can enjoy sport throughout their lives.

Recently there has been a rise in the number of so-called "freeters," who engage in temporary work without taking up regular or permanent employment, and "NEETs," who are engaged neither in education, employment nor training. The Government will support the employment of young people through such means as utilizing the power of the private sector to conduct training on a nationwide basis.

Culture and art are far from being simply means for delivering a nation's charms to the rest of the world. They also form bridges between the disparate nations of the world, each of which has its own distinct values. Japanese culture and art, not only in its traditional aspects but also in the realm of movies, animation, and fashion, are highly evaluated internationally and fascinate many people. In addition to supporting the creative activities of up-and-coming people, and enhancing a framework of activities that allows children to experience Japanese culture and art, the Government will also build up Japan's appealing brand message and disseminate it widely both at home and abroad. Furthermore, it will improve the foundation for creating, protecting and utilizing intellectual property through such measures as tightening controls over counterfeits and pirated copies and accelerating the patent examination process.

(Establishing a Basis for Future Development)

Without the promotion of science and technology, the nation will not develop. With the aim of realizing Japan as a "nation built on scientific and technological creativity," the Government will formulate its third-term basic plan for science and technology and will strategically prioritize support for research and development by increasing the budget for science and technology against the backdrop of a decrease in overall national expenditure.

The number of venture companies initiated by universities has now reached more than 1,100, and some universities have become core organizations in creating town plans and aiding local revitalization in cooperation with their surrounding local communities. The Government set up a special corporation in order to establish the Graduate School for Science and Technology in Okinawa Prefecture. With the aim of growing into a top-level international institute, it will welcome over half of its teachers and students from overseas and will also strive to cooperate with universities in other countries around Asia and farther afield.

As I pledged at the time of my appointment as Prime Minister, the entire fleet of official vehicles has now been converted to low-emission vehicles (LEVs). Today, more than 60 percent of all used-PET bottles are collected and most of the recovered material is recycled to create shirts, "furoshiki" (wrapping cloths), and egg cartons, etc. By tying together the notion of "Mottainai," literally translated as "don't waste what is valuable" and the power of science and technology, the Government will work towards realizing "a society that utilizes the three Rs: reduce, reuse, and recycle waste," and in so doing it will pursue environmental protection and economic development in tandem.

Although the price of petroleum is continuing to rise, from the standpoint of guaranteeing security in today's global situation, the Government will work to ensure the stable supply of oil and natural gas, while also promoting further energy saving measures, developing new sources of energy, and promoting nuclear power generation with safety as its fundamental premise.

It will not be an easy task for Japan to achieve the targets we agreed to under the Kyoto Protocol. Nevertheless, with the aim of addressing the issue of climate change, which is a common threat to humanity, the Government and the private sector together will steadily proceed with the plan formulated last year. Moreover, internationally, Japan intends to assume a leading role in constructing common rules by which the United States (US), China, India and other nations also participate, so that all nations can take action and the entire world can proceed as one to implement global warming countermeasures.

Over the past four and a half years, the number of high-speed internet subscribers in Japan has grown rapidly from 850,000 to 22 million, and the ratio of stock trades conducted via the Internet has undergone a huge expansion from 6 percent to 29 percent over the same period. This has made Japan "the world's most advanced IT nation," in which people can gain access to a variety of information quickly for the world's lowest charges. Also in this context, based on its IT New Reform Strategy, the Government will proceed with a complete shift to online issuing of medical fee receipts and an expansion of the use of electronic applications by the central and local governments in an effort to build a society in which high reliability and safety are ensured in terms of IT and everyone can experience the benefits of IT.

(Foreign Policy and National Security)

"We desire to occupy an honored place in an international society." In keeping close to heart this spirit of the Preamble of our Constitution, Japan has upheld freedom and democracy and achieved a peaceful and prosperous society in the post-war period. We will continue to contribute to the peace and stability of the world, resolutely maintaining our principle of resolving all matters not by force, with the Japan-US alliance and international cooperation as the basic principles of our foreign policy.

Regarding realignment of US Forces in Japan, the Government will devote all its efforts to gain the understanding and cooperation of local governments and people concerned from the perspectives of maintaining deterrence and reducing the burden on local communities such as Okinawa.

Japan intends to actively cooperate on the issues facing the international community including the fight against terrorism, alleviation of poverty, and measures against infectious diseases through the strategic use of official development assistance (ODA) and personnel contributions. Japan will strive to reform the United Nations (UN) including the Security Council so that the UN will function more effectively.

The Iraqi people are making earnest efforts to build a peaceful and democratic nation by themselves, without yielding to terrorism. Our Self-Defense Forces (SDF) personnel have been making dedicated efforts in carrying out wide-ranging activities in Samawah over these past two years including repairing many schools and roads as well as offering medical guidance and supplying water to the people. The Japanese SDF have earned high praise and the trust of the Iraqi people as troops that execute the goodwill of the people of Japan. As a responsible member of the international community, Japan will assist the nation-building efforts of Iraq, while closely watching the local situation and the actions of the international community, in addition to taking all possible measures to ensure the safety of the SDF personnel.

Last month, a UN resolution condemning the human rights situation in North Korea was adopted for the first time at the UN General Assembly, and the need to solve the abduction issue was widely recognized by the international community. Based on the Pyongyang Declaration, Japan will tenaciously negotiate with North Korea to comprehensively resolve the abduction, nuclear, and missile issues, while working together with the countries concerned.

On Japan-Russia relations, under the basic policy of concluding a peace treaty between the two countries at an early date through the solution of the issue of where the Four Northern Islands belong, we will expand our cooperation in various areas.

Regarding Japan-China and Japan-Republic of Korea (ROK) relations, exchanges between our countries are actively conducted more than ever before in a wide range of areas, including economy, cultural, art, and sports. China has overtaken the US to become Japan's largest trading partner. At the time that Japan and the ROK normalized their relations 40 years ago, the number of visits between the two countries was about 10,000 a year. Today, more than 10,000 people a day travel between the two countries. Even if there are differences or oppositions of opinions on certain issues, China and the ROK are our vital neighbors, and Japan will work to strengthen our cooperation from a broad perspective and develop our future-oriented relations built on mutual understanding and trust.

At the East Asia Summit (EAS) held last month, participating countries reached a consensus to cooperate in their measures to expand trade, eradicate terrorism, and fight against avian influenza, and set a common goal to create an open East Asian community (EAc) while recognizing the diversity of our nations and respecting freedom and democracy. Japan will support the efforts to strengthen the regional integration of the Association of Southeast Asian Nations (ASEAN) member states as well as advance the friendly relations between Japan and Asia-Pacific countries.

We must conclude successfully the WTO Doha Development Agenda negotiations. Japan will provide duty-free and quota-free market access for essentially all products originating from all LDCs, and assist developing countries to obtain new markets.

In December last year, the Leaders of Japan and Malaysia signed the Economic Partnership Agreement (EPA). Japan will further strive tirelessly to conclude similar agreements with other countries in Asia and various parts of the world.

The Government will carry out surveys of the continental shelves and seabed resources in waters surrounding Japan and make every effort to secure the marine interests of Japan.

The Government will ensure its preparedness for emergency situations in accordance with the Law Concerning the Measures for the Protection of the People in the Event of Armed Attack etc. so that the central and local governments as well as the people can take action promptly and appropriately in response to new threats like terrorism and ballistic missiles, and emergency situations.


The principle of the Emperor as the symbol of the state is established among the people of Japan. In order to ensure a stable imperial succession into the future, the Government will submit a bill to revise the Imperial House Law in accordance with the report of the advisory council.

Now that more than sixty years have passed since the end of the Second World War, debate is continuing within each political party concerning the amendment of the Constitution. I believe that the time is now ripe to actively engage in discussion with the people of Japan on the modalities of the Constitution for the new era. With respect to the drafting of a bill to stipulate the referendum procedure for amending the Constitution, the bill should be drawn up in accordance with the Constitution.

Japan has faced national crises on many occasions since the Meiji Restoration. Even in the peaceful period of the post-war period, the nation has been buffeted by events that have shaken its economy and people's life, such as the two oil crises and the shock due to the rapid appreciation of the yen, and by natural disasters beginning with the Great Hanshin-Awaji Earthquake. Our predecessors, however, have overcome all of these difficulties, and Japan has continued to develop down to the present day.

In any era, people who act upon high ideals play important roles. At the last general election, many people who possess ideals and aspirations to change politics were elected to the Diet regardless of their personal histories and educational backgrounds. Japanese people are also active overseas in diverse fields. Examples include a chef who is promoting Japanese cuisine in the West, a woman who started up a winery in France, and many others. Similarly, there are also numerous examples of foreigners who have come to Japan and engaged in lively activities here. They include a person who revitalized a sake brewery that was on the point of closing down, thereby contributing to community development, and a woman who became the proprietress of a long-established inn and helped to popularize a local hot spring resort both in Japan and overseas. In the world of sumo, Japan's national sport, foreign-born wrestlers such as Asashoryu and Koto Oshu are demonstrating their strength. While on the other hand, in the US, the home of baseball, such Japanese players as Nomo, Ichiro, Matsui and Iguchi are performing superbly as Major Leaguers. All these people have taken up challenges armed with their own ideals, made courageous efforts, overcome various ordeals, and gone on to realize their dreams and hopes.

All of us have the courage to battle bravely against crises and to overcome them, and the power that leads from a crisis to a leap forward. We must construct a system that allows us to respond to the new era and the rapidly changing environment at home and overseas while solidifying the foundations of prosperity that were created by our predecessors.

At the end of the Tokugawa Shogunate, Yoshida Shoin said, "High-minded patriots never forget that they could end up in a ditch." These words, originally spoken by Confucius, mean that a person who has ideals is always prepared and do not mind about falling to death in a ditch or valley, in order to realize their ideals. Yoshida Shoin taught preparedness in being ready to face any difficulty in order to achieve one's ideals.

In sincerely accepting the mandate expressed by the people that we should "never stop the reform," I am prepared to devote myself wholeheartedly to discharging my responsibilities as Prime Minister throughout the remainder of my term for the sake of tomorrow's development.

In this, from my heart I ask for the cooperation of the people of Japan and the distinguished members of the Diet.