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Koizumi Cabinet E-mail Magazine No. 139 (May 13, 2004)

[Lion Heart -- Message from Prime Minister Junichiro Koizumi]
(Provisional Translation)

Prime Minister Junichiro KoizumiProfile

Bills on Pension Reform

Junichiro Koizumi here.

The bills on pension reform were passed by the House of Representatives on May 11, and deliberation in the House of Councillors began yesterday.

We have received critical comments from many readers concerning the issue of nonpayment of pension premiums and nonparticipation in the pension system by Cabinet and Diet members. I call upon each and every politician to hold themselves to the highest standard and work to establish a sustainable pension system founded on mutual support between the younger generation and the elderly.

The basic principle of the pension system is the spirit of "self-help and self-reliance" and intergenerational support.

In the old days, children sent money back to their parents. How many people in their 20s and 30s nowadays send money out of their salary back to their parents? I doubt that there are many.

People who are currently in the employees' pension plan will receive monthly benefits of around 200,000 yen when they reach the age of 65. I am sure that people in their 20s and 30s consider 65 to be something far in the future and, as such, question the need to pay insurance premiums for a time so far away. However, since the public pension system is supported by tax money, the public pension system has a higher yield than any other type of savings.

It used to be the case that average life expectancy was said to be 50 years, and living to the age of 60 or 65 was considered as leading an exceptionally long life. Age 70 is also referred to as "koki," which comes from the saying that, "Since ancient times (ko) it is very rare (ki) to live for seventy years." It was a time when around 2.7 million babies were born every year.

We are now in an era in which people can expect to live to see their 80th year. At the same time, the number of newborn babies per year has now fallen below 1.2 million.

As the decrease in birthrate and the aging of society progresses, we will face a situation in which the number of beneficiaries of the pension system increases while that of people paying into it steadily decreases.

Naturally, everyone would like to give only a little and receive a lot. However, in the real world, such dreams do not come true.

The current pension reform is designed with the aim of reforming the system to create a sustainable structure with mutual support between the younger generation and the elderly over the course of time, with consideration given under such tight circumstances to two crucial points: the balance between premiums and benefits, and the extent of tax revenue collected from the people to be used for the system.

The conventional approach taken to date has been to revise the pension system every five years. However, in reforming the pension system, the Government this time will establish the future minimum pension benefits and maximum pension premiums so that people can get a clearer picture of the pension system in the future.

It is true that the pension system comprises many elements in a complicated structure that includes the basic pension obligatory for everyone, the employees' pension for salaried workers in the private sector, the mutual aid pension for public service employees as well as the corporate pension unique to each corporation.

Pension plans have developed in accordance with the characteristics of each type of business and work pattern. The Government in the past has implemented broad reforms to integrate these different plans as much as possible to create a common plan for everyone.

However, complexities still remain. Therefore, aiming to realize a pension system that is easy-to-understand and secure, we must advance reform towards the goal of unifying the pension plans. It is also important that we carry out this reform on a scale that goes beyond pensions alone, comprehensively considering the social security system as a whole, including the medical care and long-term care systems.

On this account, agreement has been reached among the three parties - Liberal Democratic Party (LDP), New Komeito and the leading opposition party the Democratic Party of Japan (DPJ) - to comprehensively review the entire social security system, including the issue of unifying the pension plans. The bills on pension reform were passed by the plenary session of the House of Representatives with the approval of the DPJ on those issues to be considered in the future. I believe that this represents a great leap forward in terms of advancing pension reform.

Our task now as the Government is to enact as soon as possible the bills on pension reform, which are currently being deliberated in the House of Councillors, and for both the ruling and opposition parties, with participation from the general public, to engage in discussion for the future of the pension system.

Last week, Mr. Yasuo Fukuda resigned from the position as Chief Cabinet Secretary and Mr. Hiroyuki Hosoda, who has been a wonderful chief editor of this e-mail magazine, has assumed his position.

Mr. Seiken Sugiura is the new Deputy Chief Cabinet Secretary, who I am sure will also do a great job as the chief editor of this e-mail magazine.

Before and after the Golden Week holiday season, I visited Wakayama Prefecture and Hokkaido and met with people, who moved to a rural area from an urban area and who are engaged in forest conservation activities with their families. I also visited ranches run under advanced management techniques and visited a company that is building houses that will last for a century using local timber. In addition, I visited and made observations of facilities related to security in Tokyo, including a prison, detention room and an inspection station for immigration. Furthermore, I had a chance to visit the interactive showroom of a consumer electronics manufacturer and gain first-hand experience on the latest equipment such as the so-called "three new holy durables" - flat-screen televisions, DVD recorders and digital cameras - as well as mobile TV phones, dishwashers, raw garbage processors and fuel cells for home use.

It remains one of my wishes to continue to find the time to visit the various regions of Japan, and advance reforms based on respect for the opinions of the local people I meet and listen to on such visits.

* The title of this column "Lion Heart" is a reference to the Prime Minister's lion-like hairstyle and his unbending determination to advance structural reform.

[What's up around the Prime Minister]

- Prime Minister Observes IT-related Technologies in Tokyo (May 10, 2004)
Prime Minister Koizumi visited the interactive showroom of a consumer electronics manufacturer and observed the cutting-edge information appliances.

- Prime Minister Observes the Local Industries in Hokkaido (May 8, 2004)
Prime Minister Koizumi observed the local industries such as dairy farming and the food industry. He then visited Chitose Air Base of the Air Self-Defense Force (SDF) and encouraged the second unit of the Japan Ground SDF to be dispatched to Iraq.

- Prime Minister Observes the Facilities Related to Security (April 30, 2004)
Prime Minister Koizumi observed the facilities including a prison, police detention room and an immigration office.

- Prime Minister Observes Activities of the Green Employment Program in Wakayama Prefecture (April 29, 2004)
Prime Minister Koizumi visited the site of the "Green Employment Program" and a shrine called Kumano Hongu Taisha.

- Prime Minister Delivers Address on the Launching of the Preparatory Office for Privatization of Postal Services (April 26, 2004)
Prime Minister Koizumi put up the signboard of the office himself and delivered an address to its members.

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General Editor: Prime Minister Junichiro Koizumi
Chief Editor: Deputy Chief Cabinet Secretary Seiken Sugiura
Publication: Cabinet Public Relations Office
1-6-1 Nagata-cho, Chiyoda-ku, Tokyo 100-8968, Japan

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