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Speeches and Statements by the Prime Minister

Press Conference by the Prime Minister on the Approval of the FY2022 Supplementary Budget and Other Matters

May 31, 2022

[Provisional translation]

 
(On his thoughts regarding the approval of a supplementary budget containing measures to address soaring commodity prices)
 
A short while ago, the FY2022 supplementary budget totaling 2.7 trillion yen was approved and enacted at a plenary session of the House of Councilors. I would like to express my appreciation for the prompt deliberations. I would also like to remind you that we had to put the supplemental budget to the agenda to address the impact of not just the COVID-19 pandemic, but also the outrageous act by Russia. Unilateral changes in the status quo by force can happen anywhere in the world. That is why we must take every possible measure to prevent another crisis. With this strong resolve, we have worked in high gear for the past ten days to ensure the success of the Japan-U.S. Summit Meeting and the Quad (Japan-Australia-India-U.S.) Leaders' Meeting, as well to deal with the parliamentary deliberations on the supplementary budget. Countries around the world are facing such problems as soaring oil, resource and grain prices, as well as instability in financial and capital markets, primarily due to Russia's aggression against Ukraine. To bring the atrocious aggression to an end as soon as possible and to restore peace, the G7 and the international community as a whole must respond in unity. In the meantime, the United States and European countries are confronted with inflation in the 7-8% range. Consumer prices in Japan rose 2.5% in April, but they are still relatively low compared to those in the United States and Europe. We have taken various measures so far, and among them is a set of programs to curb dramatic changes in prices, which has made it possible to maintain gasoline prices at around 168 yen per liter, instead of more than 200 yen per liter that would otherwise have been reached. We have set up a mechanism whereby electricity prices and some gas prices for households are capped to a certain extent. While the international prices of wheat have increased by about 20% since the aggression against Ukraine, government selling prices in Japan have been maintained at a level that is within the range of prices before the aggression. As part of efforts to support household finances, we provided a benefit of 100,000 yen to households exempt from residential tax, including those living on basic pension, from February through March. In addition, in a gradual manner from the end of May, we are providing a benefit of 50,000 yen to households raising children. On top of these initiatives, we will also set aside one trillion yen in Extraordinary Regional Revitalization Grants to support households and businesses suffering primarily from soaring electricity and gas prices and to alleviate the burden of school lunch expenses, in cooperation with local governments, according to the actual conditions of each region. We will also ensure a shift from imported wheat to rice flour, domestically produced wheat, etc. and a stable supply of strategic goods, as well as measures to enable small- and medium-sized enterprises (SMEs) to pass on costs to prices, among other things. We have also decided to extend the special measures for employment adjustment subsidies for three months until September. Under the just-approved supplementary budget, as part of the emergency economic measures formulated in April, we will continue to implement the program to curb dramatic changes in fuel oil prices aimed at containing the increase in gasoline prices until September, while also setting aside a total of 5.5 trillion yen in reserve funds to ensure a prompt response to unforeseen events during the summer, such as possible future natural disasters, resurgence of COVID-19 infections and further price increases.
 
Let me say a few words about inbound tourism. Ahead of resuming accepting foreign tourists from June 10, we will publish on June 7 guidelines on how to deal with the entry of foreign tourists, based on the results of our demonstration project. In addition to the reopening of Shin-Chitose and Naha airports to international flights carrying foreign tourists in June, we will continue to coordinate with local governments to reopen other airports, including Sendai airport, to such international flights in a gradual manner. I believe that the resumption of inbound tourism will be of great significance as it can bring about the benefits of a weaker yen to the local economy. As I have mentioned so far, the Kishida administration is committed to taking seamless measures to address primarily the recent sharp rises in oil and food prices, including the 79 trillion-yen economic package in November last year, the 13 trillion-yen comprehensive emergency measures in April of this year, and the just-approved supplementary budget. We are determined to continue to make utmost efforts to protect the lives of the citizens, while resolutely responding to the increasingly severe international situation.
 
(On whether he intends to carry out regulatory reform or deregulation going forward)
 
In order to fully activate what I have been referring to as the engine of growth, it is necessary for the Government to introduce fiscal stimulus that will serve as a catalyst, but I believe it is also important to create a favorable environment by promoting deregulation and tax reform, among other things. With regard to the grand design and action plan for a new form of capitalism, the Cabinet will make decisions based on careful coordination with the ruling parties. In doing so, the Government will steadily implement the measures I have just mentioned, such as fiscal stimulus, tax reform and regulatory reform to facilitate and encourage bold investment of private sector funds.
 

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