Policy Speech by Prime Minister Kishida to the 212th Session of the Diet
October 23, 2023
[Provisional translation]1. Introduction: Seize the trend of change
Here at the opening of the 212th session of the Diet, I will outline some of my thoughts.
The one key point I have on my mind right now as the Prime Minister of Japan is: “never miss the trend of change, but seize it.”
The Kishida Cabinet has taken on challenges one by one that have emerged in response to the changing times and that cannot be postponed, including the need to fundamentally strengthen defense capabilities, a shift in energy policy and different dimension policies for children and child-rearing, and has delivered results. We will continue to tackle the surging commodity prices and other issues facing the people with an indomitable determination to “never postpone and always provide answers.”
The first trend of change that we must seize is “economy”. We are now starting to see a shift from a cost-cutting economy that has persisted for 30 years. To seize this trend of change, we will achieve sustainable and structural wage increases and actively invest through public-private partnerships. Under the slogan of “Economy, economy and economy,” I will prioritize economy above all else.
The trend of change is also occurring in society. While Japan’s population, especially the working-age group, continues to decline, we will increasingly have opportunities to enhance productivity through digitalization and other means that will more than compensate for this decline. To turn this shift into opportunity, we will thoroughly promote digitalization alongside measures to address the declining birthrate.
The trend of change is also taking place in diplomacy and security. Globalization, which has prevailed since the fall of the Berlin Wall, has laid the foundation for peace and prosperity. However, the world has entered a new era where division and cooperation are intricately intertwined, and greater unity is required more than ever in the international community. In light of the international situation, Japan will respond flexibly while enhancing its own defense capabilities and closely cooperating with the United States, other like-minded countries and countries in the Global South.
Through the Meiji Restoration, post-war reconstruction and high economic growth, Japan has seized the trend of major changes both at home and abroad, transforming them into the “strength” of individual citizens and achieving remarkable societal transformations to be remembered in history.
And now we are once again at a historic turning point. I would like to ask all the members of the Diet gathered in this chamber to join me to take on the challenge to ensure that the future generation will look back on this Diet session in 100 years and recognize it as having created a great wave of change.
2. Economy, economy and economy
When it comes to “seizing the trend of change”, Economy is our top priority.
The Japanese economy is facing a unique and unprecedented opportunity to achieve a transformation not seen in 30 years. To seize this opportunity, I am determined to undertake bold initiatives never seen before.
For the past 30 years, the Japanese economy has given top priority to cost-cutting measures. This approach has targeted investment in people, wages, and even capital investment and R&D investment for the future, resulting in stagnant consumption and investment and leading to a further vicious cycle. This situation that could be called a “cost-cutting economy” was symbolized by low prices, low wages and low growth.
However, for the first time in 30 years, we now have a great opportunity to shift to a new economic stage. After overcoming the difficult three years of the COVID-19 pandemic, we are seeing the economic situation improve: wage increase of 3.58% for the first time in 30 years; capital investment at a record level of nominal 100 trillion yen; a 30-year high in stock price levels; steady closing of the GDP gap of 50 trillion yen; and increasing tax revenues. In contrast, the national burden ration is expected to decline as a result of income increases.
If this positive trend continues, the transition to a new economic stage will become a reality. A strong cycle of consumption and investment will begin in earnest through structural wage increases that exceed commodity price increases and the expansion of aggressive investments in areas such as decarbonization and digital technology.
This is a transformation from a “cost-cutting economy characterized by low prices, low wages and low growth” to a “growth-oriented economy driven by sustainable wage increases and active investment.” In order to completely break away from the “cost-cutting economy,” we will intensively take bold measures to “strengthen supply capacity” with a view to a “transformation period” of around three years.
Although there is a steady momentum toward a new economic stage, consumption and investment trends among the people are lacking in strength. Due to the surge in commodity prices caused by external factors, current wage increases have not kept up with the rise in commodity prices. Without strong support to accelerate transformation, the Japanese economy has the risk of reverting to its previous state, instead of entering the three-year transformation period.
Nevertheless, I will never allow the situation to go back to what it was. “Strengthening supply capacity” to vigorously advance reforms and “return the benefit to the people” to help them improve their immediate situation and overcome rising commodity prices are the “two wheels of a cart” in compiling and implementing comprehensive economic measures.
[Strengthening supply capacity]
The first key point of the comprehensive economic package is “strengthening supply capacity.”
As the GDP gap continues to close, we will shift our focus to measures for “strengthening supply capacity.”
We will focus on support measures that will contribute to strengthening supply capacity within two to three years, including large-scale investments related to security, such as those in semiconductors and decarbonization, as an incentive for introducing a “transformation period.”
Furthermore, we will take measures to fundamentally strengthen supply capacity, including those for tax reduction to strengthen the tax system for wage increases, an unprecedented tax reduction for strategic materials that improves the predictability of not only initial investment but also overall investment, a new tax reduction system regarding income from patents and others, and a subsidy system for labor-saving investments by small and medium-sized enterprises suffering from labor shortages. In preparation for a sudden surge in energy prices, we will further expand investment in energy conservation and decarbonization.
We will also strengthen support for efforts to seek new frontiers and innovations, such as AI, autonomous driving, space, and overseas expansion of small and medium-sized enterprises, and for startups.
We will also work to transform financial and capital markets, which are the foundation of economic activities. In addition to promoting reform of the asset management industry and asset ownership, we will seek to pass related bills in the current Diet session aimed at improving financial literacy, among others.
At the same time, we will advance structural reforms to raise productivity, including three-pronged labor market reforms, promotion of corporate metabolism and logistics innovation. We aim to create an economy where the cycle of growth and distribution is maintained in a sustainable manner and sustainable wage increases that sufficiently exceed the rise in commodity prices are achieved. Furthermore, regarding the package of strengthened assistance for overcoming the “barrier of annual income” (disincentive for the second earner in a family to work) which was introduced ahead of schedule in October, we will set aside sufficient budget to ensure that all those who may face the “1.06 million-yen barrier” in the future can overcome it.
[Returning the benefit to the people]
The second key point of the economic measures is “returning the benefit to the people.”
Given the current situation where wage increases do not sufficiently keep up with the sudden surge in commodity prices, we will first “return” to the people in a fair and appropriate manner a portion of increased tax revenue thanks to the growth achieved by the efforts of the working generation as a “temporary mitigation measure to completely overcome deflation,” thereby alleviating the burden on the people stemming from soaring prices. At the same time, I will strongly call on all those concerned that now is the time to shift away from the deflationary mindset ingrained over the years. Furthermore, in order to come up with specific measures to return the benefit to the people, we will soon hold a policy roundtable of the Government and the ruling parties, where I will give instructions to the tax commission of the ruling parties to conduct an immediate study.
In doing so, it is extremely important to give consideration to the concerns of low-income earners who are hardest hit by the soaring commodity prices and to respond while fully understanding their conditions. Since this summer, many local governments have begun providing to low-income households a benefit of around 30,000 yen per household. The Government has decided to expand this existing framework for priority support local grants as additional countermeasures against the soaring prices and incorporate this into the economic package.
Regarding the soaring energy prices, we expanded related subsidies in September to practically cap the gasoline price at 175 yen per liter as an emergency measure effective through the end of this year. We will maintain this measure until next spring, along with measures to ease drastic changes in electricity and gas rates. Moreover, in order to enable local governments to provide detailed support to consumers and businesses in accordance with local circumstances, we will prepare additional priority support local grants outside of the existing framework I mentioned earlier.
The national burden ratio, which has remained high due to the COVID-19 pandemic, is expected to decline partly thanks to the economic growth. The Kishida Cabinet will seek to ensure this trend of decline to prevent the national burden ratio from returning to its level during the pandemic and from increasing due to factors such as the aging of the population. To this end, our economic and fiscal management will focus first on increasing income and place importance on curbing the tax and social security burdens.
With the Japanese society undergoing major changes, we must create new regional systems that respond to the declining population and the increasingly diverse and complex needs of the people.
[Digital and society]
Digital technology has the “power” to solve social issues through new approaches. We will never repeat the “digital defeat” that we experienced in combating COVID-19. We must steadily seize the trend of change toward digitalization. We will achieve a digitalization that “leaves no one behind.” With such slogans in mind, we have promoted the “early distribution of My Number Cards” and the “Vision for a Digital Garden City Nation.”
Based on this firm determination, we will launch a “digital administrative and fiscal reform,” which will comprehensively reform the analogue-based administrative and fiscal systems.
To provide public services of higher quality than ever, even in the midst of a declining population, we will promote the use of digital technology in areas such as childcare, education and nursing care from the user's perspective. While addressing serious social challenges such as the shortage of manpower in local transportation systems and a shortage of means of transportation, we will work on the issues of ride-sharing. I myself will listen to the voices of people in various areas who are struggling in the frontline and integrate their voices in designing new systems. We will work on a thorough reform of regulations and systems and visualization of budget projects using EBPM (Evidence Based Policy Making), aiming to realize social changes and build a new Reiwa version of administrative and fiscal systems to support them.
At the same time, in order to restore public confidence in the My Number system, the Government as a whole is making efforts and aiming to complete the comprehensive review by the end of November.
[Creating an inclusive society]
We will work on creating an inclusive society where every person, whether with or without disabilities, can feel their purpose in life and where diversity is respected. We will make particular efforts to draw out the potential strength of women, young people and the elderly.
In order to swiftly implement the Children’s Future Strategy Policy, which aims to strengthen policies on an unprecedented scale, we will promptly come up with concrete ideas about formulating systems that are necessary for immediate intensive efforts and put them into action where possible. We will consider implementing various measures ahead of schedule and raise the public spending on childcare support per child to the top level among OECD nations. We will accelerate efforts based on the “Emergency Measures Package to Prevent Sexual Abuse and Assault against Children and Youth” and strengthen measures against school absenteeism and bullying. We will also work on revitalizing public education through measures such as reviewing the treatment of faculty and staff.
We must create a society where people with dementia can live with dignity and hope and where the elderly, including those without relatives, can grow old with peace of mind.
We will newly establish the “Council for the Realization of an Aging Society that Addresses Dementia,” and prepare for the enforcement of the “Basic Act on Dementia.” In light of the arrival of a new era with the approval of lecanemab, we will work on developing systems to provide early detection, testing and medical services, as well as further research and development of therapeutic drugs. At the same time, we will address issues in the daily lives of the elderly, such as securing housing and fidelity guarantee needed when they are hospitalized or are moving in.
In addition, we will work on a review of official prices that affect the salaries of frontline workers and create a system that will enable the increase in profits of businesses due to the aging of the population to structurally lead to the improvement of the treatment of such workers.
We will continue to take every possible measure to deal with COVID-19, and as for hay fever, we will comprehensively promote measures to address the source of the allergy, the prevention of its spread as well as the onset and exposure to the disease, thereby reducing the burden on the public.
Tourism is the engine of regional development. After overcoming the COVID-19 pandemic, many tourist destinations are starting to restore their liveliness. However, the problem of overtourism, such as overcrowding caused by tourists who arrive at particular destinations at particular times of the day, poor manners and the shortage of manpower, is becoming evident. We will also introduce measures towards a sustainable tourism industry.
We will also work on initiatives for a circular economy that balances regional revitalization and solving social issues. In order to ensure a stable and sustainable food supply, we will strengthen food security and promote smarter and greener agriculture. At the same time, we will make vigorous efforts to promote the export of agricultural, forestry and fishery and food products in order to expand market channels, through measures such as the early authorization of an organization for promoting the export of scallop. The basics of agricultural policy is to be found in the field. While continuing to work in close contact with each region and listening to the thoughts of people working in the frontline, we will seek to transform agricultural policies and provide practical support.
Local small and medium-sized businesses are at the core in supporting regional revitalization. In order to make it possible to realize sustainable wage increases, we will vigorously provide support for labor-saving investment and digital investment, and promote measures for passing on the cost of wage increases. At the same time, regarding the so-called “zero-zero loans,” or loans with no interest and no collateral, we will urge appropriate actions, according to the situation in the field.
During the past two years since I took office as Prime Minister, I have visited every corner of the country and exchanged opinions directly with the people, including through approximately 60 occasions when I sat down with the local people. While suffering from dwindling population and depopulation, many people are working hard toward tomorrow in their respective fields.
I believe that the role of politics is to provide utmost support to the people struggling in the frontline. Japan's treasure and strength lies in its regions. Now is the time for us to work vigorously together on regional revitalization.
[Reconstruction of Fukushima and national resilience]
"Under the slogan “without the reconstruction of Tohoku, there will be no revival of Japan," we will continue to work with strong determination to reconstruct the disaster-affected areas, and steadily proceed with plans to lift evacuation orders in “difficult-to-return” zones, as well as measures to reconstruct such areas once the orders are lifted.
This year has seen various places hit by linear rain belts and other disasters. Based on lessons learned from such events, we will introduce the power of digital technology to build national resilience, such as by advancing the capacity for predicting linear precipitation bands. We will set an environment for the development of the Linear Chuo Shinkansen, thus advancing efforts for the construction of a wide-area transportation network that will remain uninterrupted even in the event of a disaster. We will also accelerate the undergrounding of electric cables, which will contribute to a more resilient power supply, including in remote island areas of Okinawa.
[Expo 2025 Osaka, Kansai]
Regarding the Expo 2025 Osaka, Kansai, the first such event post COVID-19, we will work on an all-Japan basis with a strong sense of crisis stemming from the slow progress of preparation, including delays in the construction of pavilions by overseas participants.
4. Diplomacy and security
[Changing international environment and the Kishida diplomacy]
Diplomacy and security are also undergoing major changes. With the end of the “post-Cold War era”, major changes are emerging toward a new era. Serious situations are occurring frequently in various parts of the world, including Russia's aggression against Ukraine and the situation involving Israel and Palestine, and even in areas surrounding Japan, unilateral attempts to change the status quo and North Korea's nuclear and missile development continue, leading to the most severe security environment since the end of World War II.
In order to seize the trend of change in such times, the Kishida diplomacy will seek to take one step further in building a free and open international order based on the rule of law. Focusing on the most fundamental value of “human dignity,” we will vigorously promote Japan's position of leading the world filled with cooperation rather than division and confrontation.
[Proactive development of the Kishida diplomacy]
During the past two years since its inauguration, the Kishida administration has deepened its relationship with the United States, Japan’s only ally, improved Japan-ROK relations, provided strong assistance to Ukraine, and made major changes in diplomacy facing Russia. And at the G7 Hiroshima Summit, we sent a powerful message to the world, beyond the G7 framework, that we will protect the free and open international order based on the rule of law.
Vulnerable countries and people are hardest hit by global crises such as food crises, climate change and infectious diseases. Japan will listen to the voice of the Global South, which is becoming increasingly influential in the international community, and provide fine-grained cooperation that is uniquely to Japan, while deepening economic activities, with a focus on human bonds.
This year marks the 50th anniversary of the establishment of Japan-ASEAN relations. At the ASEAN-Japan Commemorative Summit scheduled for the end of this year, we will set out a new vision for cooperation for the next 50 years, thus driving the Indo-Pacific, a growth center.
Furthermore, at a time when the situation surrounding nuclear disarmament has become even more severe, Japan, as the only country to have suffered atomic bombings in wartime, must lead the way toward a “world without nuclear weapons.” Japan will make realistic and steady efforts in line with the Hiroshima Action Plan.
Regarding the relationship with China, I have proposed the idea of a “constructive and stable relationship,” and I am advancing dialogue at the summit level. Our stance toward China will remain the same: I will continue to say to China the things that need to be said; strongly urge China to act responsibly; hold dialogue with China including on outstanding issues of concern; and cooperate on matters of common interest.
With regards to ALPS treated water, we will continue to provide highly transparent information based on scientific evidence. In response to the Chinese Government’s action to suspend imports of Japanese marine products, we request that it be immediately lifted, while also taking every possible measure to protect Japan’s marine product-related businesses by expanding sales channels to avoid dependence on the Chinese market.
Regarding Japan-ROK relations, we are deepening a wide range of cooperation by leveraging my personal relationship of trust with President Yoon. In August, at Camp David, we were able to demonstrate both at home and abroad our determination to carve out a new era of trilateral Japan-U.S.-ROK partnership. We will advance strategic cooperation among the three countries, including on economic security. We will also advance the Japan-China-ROK framework.
While Japan-Russia relations are facing difficult times, we remain firmly committed to resolving the territorial issue and concluding a peace treaty.
With the aging of the families of abductees, the time-sensitive abduction issue is a humanitarian issue that requires careful and continuous attention, and the Kishida administration attaches top priority to it.
In order to realize the return of all abductees at the earliest possible date and to elevate the Japan-North Korea relations to a new stage, while also seeking to resolve various issues with North Korea based on the Japan-DPRK Pyongyang Declaration, we will advance high-level discussions under my direct initiative to realize a Summit Meeting with Chairman Kim Jong Un. I will make decisions from a wide perspective in order to build a fruitful relationship between Japan and North Korea that meets the interests of both countries and contribute significantly to peace and stability in the region.
[Fundamentally strengthening defense capabilities]
To solidify this diplomatic footing, it is important for Japan to strengthen its own defense capabilities.
In order to resolutely protect the lives of the people and Japan's territory, territorial waters and airspace, we will secure a defense program worth 43 trillion yen over five years and promptly realize a fundamental strengthening of our defense capabilities.
Regarding the timing for implementing tax measures to fundamentally strengthen defense capabilities, we will make a decision based on the framework decided by the Cabinet at the end of last year, the outlook for budgetary resources, including the development of administrative and fiscal reform, trends in economy and wage increases, as well as the Government’s response to them.
We will further enhance the effectiveness of the Self-Defense Forces’ joint operation and reinforce the deterrence and response capabilities of the Japan-U.S. Alliance. At the same time, we will continue to work to reduce the impact of U.S. bases and advance the relocation work in Henoko to achieve the full return of the U.S. Marine Corps Air Station Futenma as soon as possible. We will also create a strong Okinawan economy.
[Constitutional revision and imperial succession]
Revising the Constitution, which is the nation's basic law that “defines what the country should be like,” is also an important issue that cannot be postponed. During a recent Diet session, there was a lively discussion at the Commissions on the Constitution of both the House of Representatives and the House of Councilors. I welcome this development. Revision to the Constitution ultimately requires the judgment of the people. I sincerely hope that more active discussions will be held than before, including the formulation of specific draft articles, with a view to advancing the procedures for the proposal to be submitted to the Diet.
In the meantime, various issues related to ensuring stable imperial succession are important issues connected to the fundamentals of the country, with a particular concern on the issue of how to address the declining number of Imperial Family members. With this in mind, the Government has compiled specific measures to secure the number of Imperial Family members and reported them to the Diet. I hope that active discussion will take place in the Diet regarding this important issue so that a “consensus of the legislature” can be compiled as soon as possible.
Regarding the former Unification Church, the Government recently filed a request for a dissolution order based on the Religious Corporations Act. The matter will be deliberated in court going forward, but the Government will ensure all possible measures will be taken. At the same time, in order to prevent such serious damage from occurring again, we will strive to strictly enforce the Act on Preventing Unjust Solicitation of Donations by a Corporation and take appropriate relief measures for the victims, such as providing counseling services tailored to their real needs.
This summer, I visited various sites around the country, where I saw the “strength” of the Japanese people to seize the trend of change.
- At the reconstruction site of Shurijo Castle in Okinawa, which was destroyed by a fire, the reconstruction process itself became a touristic “strength” through the “visualization of the reconstruction.”
- “As you get older, you pave the way for tomorrow.” This was the slogan at an agriculture-welfare collaboration site in Tochigi prefecture, where people with disabilities were experiencing the joy of working, filled with the “strength” to produce wine that is recognized internationally.
- “Focus on what you can do, not what you can't do.” This philosophy at the dementia care site in Gunma Prefecture reflects how people look at dementia in a positive manner and use it as a “strength” as they grow older.
- A student studying robotics technology in Fukushima Prefecture said with shining eyes, “I want to be involved in the decommissioning of nuclear reactors in the future.” This is a sprouting “strength” that will drive Japan’s technological capabilities.
In the Reiwa era again, the Japanese people’s “strength” to seize the trend of change is being steadily passed down. We will ensure that the footsteps of change will be communicated to the people and will create systems for turning changes into opportunities to take on challenges. We will remove outdated systems that have hindered efforts to take on challenges and create an inclusive society unique to Japan, where all people can shine.
If we achieve the expansion of so-called “well-being,” such as people’s motivation, hope and social affluence, combined with sustainable wage increases, the Japanese people will once again believe that “tomorrow will be better than today” in this Reiwa era. We will realize an era in which the Japanese people can believe that “tomorrow will be better than today.”
At this historic turning point, the Kishida administration will seize the trend of change and turn the change into strength. I am determined to spearhead this endeavor, devoting myself fully to this responsibility, even putting my tenure as prime minister at stake. I ask for the understanding and cooperation of all citizens.
Thank you very much for your attention.