Press Conference by Prime Minister Takaichi

Thank you all for attending.

As I begin my remarks, I wish to offer my heartfelt sympathies to all those who have been affected by the recent series of natural disasters, including the earthquake centered off the eastern coast of Aomori Prefecture.

The extraordinary session of the Diet concluded today. I have been working resolutely since assuming the office of prime minister, placing foremost priority on responding to the rise in prices now facing the Japanese people.

First, I have fulfilled our pledge to the nation with the passage of the supplementary budget. Moreover, I believe that through this supplementary budget, my administration has successfully laid out a general direction towards realizing both a strong economy and strong diplomacy and security.

When we formulated the supplementary budget, taking our broad-scale coalition agreement with the Japan Innovation Party as our basis, we flexibly incorporated policy proposals from various parties and also received the support of the Democratic Party For the People and Komeito. I wish to express most sincerely my appreciation to the members of both the ruling and the opposition parties who engaged in vigorous debates within our limited window of time.

In addition, since I first assumed this post, I have worked with a sense of speed to set up frameworks for addressing a broad range of policy issues. These include the Headquarters for Japan’s Growth Strategy, the Headquarters for the Strategy for the Future of Regions, the Population Strategy Headquarters, the Ministerial Council on the Acceptance of Foreign Nationals and the Realization of a Society of Well-Ordered and Harmonious Coexistence, and the Ministerial Council on Measures to Address Bear-related Damage. My administration will move prudently and expeditiously as we advance discussions on these matters and deliver results.

Furthermore, during this Diet session, all eleven of the bills submitted by the government were enacted. Ten of these were bills submitted to the extraordinary session and one was carried over from the ordinary Diet session for continued deliberations.

Additionally, we saw the enactment of a law to abolish the provisional tax rates on gasoline and the delivery of diesel oil, based on an agreement among six parties, namely the Liberal Democratic Party, the Japan Innovation Party, the Constitutional Democratic Party of Japan, the Democratic Party For the People, Komeito, and the Japanese Communist Party.

As a reform that puts legislators themselves on the line, we also passed an amendment stipulating that cabinet members and other designated persons -- including the prime minister, who is appointed from members of the Diet -- will not receive remuneration for those duties beyond the compensation normally provided to Diet members.

It is a matter of great regret that the bill to reduce the number of seats in the Diet, an important pledge we made with the Japan Innovation Party, was not even taken up for deliberation. We will continue our efforts during the ordinary Diet session to gain the understanding of the opposition parties and get this bill passed.

In the time remaining in 2025, on December 19, we intend to formulate the ruling coalition's policy outline on tax reforms for fiscal year 2026, and on December 26, we expect to take a cabinet decision approving the initial budget for fiscal 2026. We will continue to roll up our sleeves and take on the various challenges of political administration.

Within the supplementary budget, approximately 8.9 trillion yen has been allocated to measures designed to enhance security in people's daily lives and respond to rising prices.

Our measures to reduce the price of gasoline and diesel, our assistance for electricity and gas bills, our grants to local regions for prioritized assistance, and our child-rearing support allowances to help counter price increases are expected to provide more than 80,000 yen in assistance annually on average per household, in the case of a family of four, with two parents and two children. In particular, we have increased subsidies for gasoline and diesel without waiting for the provisional tax rates to be abolished. I believe people are already experiencing the tangible effects of a lighter burden.

Addressing the needs of business operators, and with a view to protecting the lives of our citizens while safeguarding their daily lives, we have allocated approximately 1.4 trillion yen towards a support package for medical care, nursing care, and related services that will be carried out ahead of schedule, without waiting for the timing of regular revisions to reimbursements for medical and nursing care services. This initiative, which will center on medical institutions and nursing care facilities operating in the red, will provide support for strengthening their management base and for improving the treatment of medical and nursing care providers. We will also undertake effective countermeasures as part of the regularly-scheduled revisions to the reimbursements provided for medical and nursing care services taking place in fiscal 2026.

We have also set into place roughly 1 trillion yen of bold initiatives to foster an environment making it easier for small- and medium-sized enterprises (SMEs) and small-scale employers to increase wages. We will work to implement these swiftly so that people can feel the effects of these measures in concrete ways at the earliest possible time.

As for disincentives for second earners within a household to earn more than 1.03 million yen in annual income, known as the “1.03-million-yen barrier,” fiscal year 2025 revisions to the Income Tax Act will result in income tax cuts of roughly 20,000 to 40,000 yen per relevant taxpayer, beginning with this year's year-end tax adjustment. We are also now engaged in final coordination between the ruling and opposition parties aimed at bringing about, as part of our fiscal year 2026 revisions to the Income Tax Act, a further raising of the basic deduction in a manner linked to inflation.

As we formulate the initial budget for fiscal 2026, we will respond effectively as we work to make education effectively free, beginning from the 2026 fiscal year.

What Japan needs right now is not an undermining of our strength as a nation through excessive austerity fiscal policies, but rather a bolstering of our national strength through proactive fiscal policies.

For the sake of the next generation as well, we will work to bring about an economic virtuous cycle, which will result from a growing economy leading to improved corporate earnings and also higher personal income associated with wage increases. By creating a situation in which tax revenues rise even without raising tax rates, we will realize sustainability in our public finances.

At the same time, pursuing responsible and proactive public finances entails a forward-looking, strategic employment of fiscal policies and is not in any way about senselessly scaling up government spending simply for the sake of attaining scale.

We have established the Office for the Review of Special Measures Concerning Taxation and Subsidies within the Cabinet Secretariat. With Minister Katayama at the helm, the office aims to ensure efficient fiscal spending that has been trimmed of waste. We will press forward with a review of all possible items, beginning with fiscal 2026 revisions to the Income Tax Act and the fiscal 2026 initial budget.

By employing strategic fiscal policies grounded in the principle of spending wisely, we will forge a strong economy and boost our growth rate. Alongside that, we will steadily lower our government debt-to-GDP (gross domestic product) ratio, ensure fiscal sustainability, and bolster the confidence we receive from both domestic and overseas markets.

In fact, the total value of sovereign bonds we issued across our initial and supplementary budgets combined was less than the total value of bonds issued in fiscal 2024 after adjustments for the supplementary budget, a situation demonstrating we are giving due regard to the sustainability of public finances.

We are now formulating the initial budget for fiscal 2026 in tandem with the supplementary budget for fiscal 2025. As we make tough, strategic choices across the budget as a whole, we are prioritizing key policy areas within the budgets and working to finalize budgets that ensure confidence from the markets.

Our growth strategy aims to turn people's unease and apprehension over their current lives and the future into hope by building a strong economy. The crux of that growth strategy is strategic investments that enhance resilience against potential crises.

That means strategic investments that the Government will implement preemptively, hand in hand with the private sector, to address various risks and social issues, including risks and issues in the areas of economic security, food security, energy and resource security, health and medical care security, national resilience, and cyber security. If Japan can expand into domestic and overseas markets its products, services, and infrastructure that contribute to the resolution of globally shared issues, it will lead to further economic growth for Japan.

In the supplementary budget, we have allocated some 6.4 trillion yen as initial funding that will enable necessary policies to get off to an early start. As one part of our fiscal 2026 Income Tax Act revisions as well, we intend to set up tax measures fostering growth, including the creation of bold tax incentives for promoting investment.

In the initial budget for fiscal 2026, we will provide more in-depth support targeting strategic fields, including support for developing general-purpose foundation models for artificial intelligence (AI) robotics, and also seamlessly promote strategic investments that enhance resilience against potential crises.

Under the Takaichi administration, we launched the Headquarters for Japan’s Growth Strategy and identified 17 strategic sectors and eight cross-cutting issues.

As for the 17 strategic sectors, by the summer of 2026 we will formulate a "roadmap" for public-private investment, which will include a framework operating within a pre-established funding structure that commits funding over multiple fiscal years as well as measures to create and expand demand through government procurement, regulatory reforms, and other means, including bold tax incentives for promoting investment.

Improving predictability for business operators will enable us to draw out private sector investment in a powerful way. Furthermore, as we work to become a new kind of technology-driven nation, we intend to significantly enhance our tax incentives for research and development in technological domains such as space and fusion energy, which are expected to grow and also involve research and development that is unusually challenging.

Following the supplementary budget for fiscal 2025, the initial budget for fiscal 2026 will also greatly expand measures for building up the foundations for basic research at our universities and other institutions.

In addition, making use of more than 55 billion yen in our supplementary budget, we will assist artists and creators who bring into being Japan's appealing content in forms such as J-pop, manga, anime, movies, and games. Specifically, we will provide support as they launch new activities in a larger number of countries. With a target of generating overseas sales of 20 trillion yen, we pledge support that extends over multiple years, with vigorous backing to be provided through public-private cooperation. I myself hope to have the opportunity to listen firsthand to the perspectives of those concerned with these initiatives.

In addition, bolstering the resilience of our supply chains, including for rare earths, is a matter of great urgency.

From the perspective of ensuring stability in people's daily lives and in Japan's manufacturing operations, the Government will work united in thoroughly identifying risks and in undertaking measures in an expeditious manner, without hesitation, including when making use of the supplementary budget. Together with this, mindful of the supply destabilization that has resulted from recent international developments, we will make use of all possible opportunities to build up dialogue over time with like-minded countries sharing our concerns, with the aim of strengthening our cooperation with them.

We have also compiled a package of measures addressing bear-related damage, which is creating unease among the public. Our supplementary budget of 12.9 billion yen can be granted retroactively to projects that local governments have already implemented as urgent countermeasures. We will implement countermeasures in a seamless fashion both before and after the season for hibernation, including by carrying out measures through the early use of the initial budget for fiscal 2026.

Since assuming office as prime minister, I have been afforded many valuable diplomatic opportunities, including the Association of Southeast Asian Nations (ASEAN)-related Summit Meetings, the Asia Zero Emission Community (AZEC) Leaders Meeting, the Japan-U.S. Summit Meeting, the Asia-Pacific Economic Cooperation (APEC) Economic Leaders’ Meeting, and the G20 Summit.

I have attended six international meetings and held summit talks 22 times with 18 countries and organizations.

I believe that, amid rapid changes in the international community, I have been able to raise Japan’s profile.

Regarding the Japan-U.S. Alliance, which is the cornerstone of Japan’s diplomacy and security policy, through President Trump’s visit to Japan and our telephone talks, we have confirmed our mutual commitment to building a “New Golden Age” for our alliance and forged a relationship of trust that allows us to speak by phone at any time.

We will continue to work in close coordination with the United States on global challenges, ranging from the Indo-Pacific to Ukraine, the Middle East, and the Global South, and I intend to further advance Japan-U.S. relations.

China is also an important neighboring country for Japan, and it is necessary to build a constructive and stable relationship.

That said, there are security-related concerns between Japan and China, including those related to economic security.

We intend to engage in candid dialogue and comprehensively promote a “Mutually Beneficial Relationship Based on Common Strategic Interests.”

My response regarding a survival-threatening situation does not alter the longstanding position of the Government of Japan.

We intend to tenaciously explain this point to China and the international community at various levels.

Through meeting with leaders from all around East and Southeast Asia, I was able to build relationships of trust at the leaders’ level. Taking this as a starting point, I will work to advance the evolution of the “Free and Open Indo-Pacific,” or FOIP.

In particular, while acknowledging that there are various issues on which the positions of Japan and the Republic of Korea (ROK) differ due to our proximity as neighboring countries, ROK President Lee Jae Myung and I agreed to manage these issues through our leadership and to develop Japan-ROK relations in a future-oriented and stable manner.

Going forward, we will actively promote “shuttle diplomacy” between Japan and the ROK.

Given the rapidly changing security environment, we must implement a fundamental reinforcement of our defense capabilities in accordance with Japan's sovereign discretion.

To that end, we will accelerate discussions focused on revising the "Three Strategic Documents" within 2026.

In addition, the enactment of the supplementary budget allocating 1.1 trillion yen for security-related expenditures, in combination with the initial budget for fiscal 2025, has resulted in us attaining a level of defense spending equivalent to 2 percent of GDP, as stipulated in our National Security Strategy.

Discussions regarding the fiscal resources to be used towards that end are still ongoing within the ruling parties' research commission on the tax system, but we aim to settle the matter in a manner which does not impose any new or additional burdens on household budgets.

When I was young, I was fortunate enough to have the opportunity to study at the Matsushita Institute of Government and Management directly under Mr. MATSUSHITA Konosuke himself, the founder of what is now Panasonic and the director of the institute. The Institute upholds Five Pledges, one of which is "to realize heartfelt ambition." This is a pledge to "strive to the utmost, always maintaining firm resolve. No matter what obstacles present themselves, we will find a way to overcome them. Success consists of the willingness to persist until one has succeeded."

The Takaichi Cabinet has still only just gotten started. We will without fail make the Japanese archipelago more resilient and more prosperous and once again raise Japan up to stand at the forefront of the international community. Until that aspiration is fulfilled, my Cabinet will make every effort to work for the Japanese nation and the Japanese people as the “Cabinet of Determination and Progress,” filled with the determination to press ahead tenaciously under any circumstances.

This concludes my opening statement. Thank you very much.