Policy Speech by Prime Minister Morihiro Hosokawa to the 128th Session of the National Diet

(September 21, 1993)

I am pleased to see that their Majesties the Emperor and Empress returned safely home on September 19 from their trip to Italy, Belgium, and Germany, and I am confident that their trip has added a new page to the long history of friendship and good will between Japan and Europe and further enhanced the contacts between our peoples.


It is now about a month and a half since this coalition government came into office to very warm popular expectations. Whether or not this government is able to demonstrate its worth and to meet this popular mandate, however, depends upon what specific success we have in dealing with the immediate issues before us, and I am well aware that the real time of testing starts now.

It goes without saying that the first thing that we must do is to restore popular trust in government, but there are also a number of other issues that cannot wait, including dealing with the economic emergency, making a start on medium- and long-term socio-economic structural reforms, and responding to the very fluid international situation. Accordingly, this government intends to try to manage national government focusing on reforms in the three main areas of politics, economics, and administration.

I have already outlined the new government's political ideals and objectives in my address to the 127th Session of the Diet, and I would thus like this time to explain our policies on the immediate issues before us and to ask for the further understanding and cooperation of the people in this effort.

For Passage of the Political Reform Bills

As I explained in my Policy Speech to the previous Session of the Diet, this Cabinet views political reform as absolutely essential, and it is our first priority. With the drama of old systems and values crashing to the ground with the end of the Cold War in the international arena, Japan has been beset with the scandal of political corruption virtually every year and the spectacle of the Diet in a frenzy trying to deal with these scandals has not only exacerbated distrust of politics but even threatens to undermine Japan's international credibility. We can put political reform off no longer, and it is essential that we start to work resolutely developing policies to fulfill our responsibilities as an international state and to stabilize and improve the lives of the people with new arrangements after having determinedly implemented political reform.

Because determinedly implementing political reform including reform of the election system means radically transforming the political arena, it is only natural that there should be many different opinions and divergent interests here. Yet all of us involved in politics here today must face up to the fact that the distrust of politics could become irremediable and more and more people could well decide they are fed up with politics or do not want to have anything to do with politics if we shy away from political reform.

The government will be submitting a package of political reform bills to this Session of the Diet consisting of four bills -- the Bill to Amend the Public Office Election Law, the Bill to Establish the House of Representatives Election Redistricting Council, the Bill to Amend the Political Contribution Control Act, and the Bill for Public Funding for Political Parties -- and will be making every effort to see them enacted, and I would like to ask the members of this Diet to engage in full and fruitful discussions of these bills for their prompt passage.

Given that parliamentary democracy could conceivably become an empty play and fall dysfunctional, depending upon the elections system, it is axiomatic that the elections system forms the very core of our parliamentary democracy. I believe the deliberations in the Diet to date have resulted in a general consensus that it is inevitable that, with the present multiple-representative constituencies, elections entail clashes among candidates from the same party and are necessarily fought not on policy differences but rather on a personal basis among the candidates, which has in turn meant that politics is inadequately responsive to policy issues and been a major factor giving rise to the many problems of money in politics.

Likewise, when it is realized that the fact that the balance of power among the political parties has become ossified over the years in these multiple-representative constituencies has resulted in a loss of creative political tension and only half-hearted policy debate, as well as providing a culture nurturing political corruption, it is clear that now is the time to effect dramatic reform of the multiple-representative constituencies and to lay the basis for an election system focused on policies and parties.

Thus the Bill to Amend the Public Office Election Law provides for the adoption of a two-ballot, single-plus-proportional representation system with 250 representatives elected from single-representative constituencies and another 250 elected in a proportional system. It is expected that this system will enable the people to express their governmental preferences clearly and, combining the best features of both single-representative constituencies where the candidates are known to the voters and proportional representation reflecting the broad diversity of public opinion, will make it possible to achieve sounder parliamentary democracy. In drawing the single-representative election district lines, it should be noted, I intend to establish a House of Representatives Election Redistricting Council within the government and to draft a redistricting bill following this Council's recommendations so as to ensure fairness in this process.

Furthermore, it is essential that we take resolute anti-corruption measures to ensure that there are no further incidents of political corruption such as have been the direct cause of the popular distrust of government. The bill that will be submitted would not only disallow contributions to individual politicians themselves but would allow corporate and organizational contributions only to political parties and other political funding organizations, and among its other provisions are those for suspending the civil rights of any found to have violated the Political Contribution Control Act and for expanding the scope of co-culpability and strengthening the penalties for election campaign violations. I am confident that these measures will have a major deterrent impact on political corruption. While I know that opinion is divided on the desirability or not of retaining corporate and organizational contributions, I personally think it would be better the less dependent politics was on such corporate and organizational contributions, and we have taken a major step forward in the direction of disallowing such contributions. However, it remains true that political activity does in fact take money, and we need to endeavor to lay the groundwork for eliminating corporate and organizational contributions as by adopting a system of clearly defined public funding subsidies as part of the cost of achieving sound democracy. Thus the bill to be submitted would sharply lower the upper limit for report-exempt political income for political organizations and would otherwise seek to ensure funding transparency, and I am asking for the people's understanding of this endeavor.

While restoring popular trust in government is the foremost aim of political reform, I would also expect these reforms to be a detonator forcefully promoting the many reforms now being called for in Japan, including the decentralization of authority, deregulation, and other administrative reforms impeded by structures made rigid by the collusion among politicians, bureaucrats, and industrialists, the shift to a new priority on the interests of ordinary people, and the attainment of socio-economic structures at harmony with the rest of the international community.

I feel the government and opposition parties share a common awareness of the need for and importance of political reform, and I am determined to do everything I can to win the cooperation of this Session of the Diet and to implement political reform during this Session so that we can start to work on truly resolving the problems that the people face in their daily lives and can achieve tangible results as soon as possible.

Responding Flexibly to the Economic Emergency and Reforming Socio-economic Structures

With the sluggish growth in personal consumption, the slump in private-sector non-residential investment, and other factors joined by, for example, the yen's rapid appreciation and the cool summer weather, the Japanese economy finds itself in a truly difficult situation. Not only are small businesses having a hard time of it, I would not be surprised if there were large numbers of Japanese concerned about the future. While the collapse of the bubble economy and the consequent deterioration in corporate asset positions are behind this prolongation and exacerbation of the economic recession, it should also be noted that structural problems such as the systemic inefficiencies epitomized by the disparities between domestic and overseas prices for a wide range of items have also impeded the emergence of truly satisfying consumer lifestyles and the development of dynamic business practices based upon entrepreneurship.

If the economy is to recover and to get back on the move again, it is essential that the private sector, which is the driving force in the Japanese economy, once more be able to realize its full potential, and I believe the thing the government needs to do now to help Japan get out of this long recession is to make every possible effort to enable the private sector to exercise its vigor to the utmost by dispelling the sense of uncertainty and dead-endedness about the future. It was with this in mind that I convened the Ministerial Conference for Economic Measures in late August, soon after my Cabinet took office, and moved quickly to draw up a wide range of policies enabling us to respond swiftly to the harsh economic situation the people confront, not only including deregulation policies and policies to ensure that the benefits of yen appreciation are passed along but also including fiscal relief measures for those hurt by the yen's appreciation, the victims of natural disasters, and the like and to implement these measures as quickly as possible.

With the priority emphasis on that deregulation that will have the most direct impact for invigorating the economy and expanding domestic demand and for promoting imports, we have recently decided to implement deregulation for a wide range of 94 items, including, for example, items that contribute to the creation of new business opportunities and business expansion in such fields as new developments in telecommunications and broadcasting and as micro-brewery beer, items that contribute to greater flexibility in gas bills, travel charges, and other public utility rate schedules, and items that contribute to enhanced convenience in Japanese life, such as revising food label regulations and easing automobile inspection regulations, and I expect these deregulatory efforts to have substantial economic impact.

Likewise with efforts to ensure that the benefits of yen appreciation are passed along, we have decided to quickly implement measures such as to ensure that electricity and gas customers, international telephone callers, and other people benefit from the yen's strength and to enhance the availability of discount tickets for rail, air, and other travel. Even aside from such regulated industry rates, we have asked the relevant industries to ensure that the benefits of yen appreciation are promptly passed along in foodstuffs, clothing and sundry goods, cosmetics, gasoline, and other ordinary consumer goods imports impacting on everyday life. The government will continue to listen to the people and will work to provide useful information so that these efforts to have the benefits of the yen's appreciation are truly effective.

While it goes without saying that these efforts are important to overcoming the current economic difficulties, it is essential that we flexibly implement policies with greater immediate impact to provide new momentum to economic recovery. In drawing up this latest package, we have, in addition to steadfastly implementing the economic package adopted in April and other measures, moved to respond appropriately to the serious situation created by the all-too-frequent natural disasters and the abnormally cool summer weather and by the yen's rapid appreciation and other events by moving for the rapid implementation of disaster-relief and other operations for areas devastated by the torrential rains, typhoons, and other natural disasters. Forthermore, we are implementing a range of measures including carefully tailored legal and other support for the invigoration of small businesses in very stringent economic straits, measures to enhance and strengthen employment policies, and measures to ensure smoother financing. It is imperative that we lay the development foundations for the future and make steady progress toward the medium- and long-term objective of vital socio-economic structures that are in harmony with the rest of the international community and in which we can feel truly well off. To this end, we have decided to take dramatic new measures to encourage housing investment as with enhanced lending provisions for an additional 100,000 units and stepped-up tax incentives, to promote social overhead capital investment from the perspective of the ordinary consumer, to take tax measures to promote capital investment contributing to structural adjustment, to draft basic policies relating to import expansion, and to implement other policy remedies.

Along with making every effort for this package's steadfast implementation, the government will also monitor economic conditions, employment figures, and other data closely and will strive for flexible economic management so that people do not become even more discouraged than they already are about the economy.

On the issue of a possible income tax cut, an issue on which there has been considerable discussion, I believe that, given the very stringent fiscal straits that we currently find ourselves in, we must avoid trying to pay for such a tax cut with deficit-financing bond issues and should rather try to deal with this in the context of building a balanced tax structure including income, consumption, asset, and other taxes. Thus it was that I attended the general meeting of the Tax Commission the other day and asked them anew to deliberate fully on fundamental reforms to the tax system, including, for example, a possible cut in income taxes and other changes to the ratio between direct and indirect taxes, and to submit the appropriate policy recommendations to me. I would like to deal with this issue of tax reform respecting the results of the deliberations within the Tax Commission and paying all due heed to popular opinion.

If we are to prepare for the advent of the truly aged society and at the same time create economic structures compatible with living together with the rest of the international community, we must first seek to further raise the standard of living by acting now while we still have potential vigor to promote quality social overhead infrastructure improvements and other advances. It may well be that these efforts would also lead, for example, to the creation of new demand and a reduction in our current account surplus. Thus it is that I believe it is important, along with making an effort for priority improvements in housing and parks, in garbage disposal, and in other residential environmental and welfare facilities and in urban transport network improvements and other areas that have direct convenience-enhancement benefits for the ordinary consumer, that we make steady progress in improving and upgrading research and development facilities, in promoting greater use of information processing technology in educational institutions and public administration, and in other areas that contribute to enhancing the development foundations for the future. It is from this perspective that, while forcefully promoting fiscal reform, I intend to work on fiscal policy management for the effective, priority allocation of our limited resources.

Second, it is essential that we work to promote governmental deregulation and the reform of those old competition-restrictive systems and practices that are unsuited to the new era and to advance consumer interests and further enhance economic efficiency by, for example, rectifying the differentials between Japanese and overseas prices and to create an economy and society broadly open to participants both inside and outside of Japan. The recent deregulation policies and measures to ensure that the benefits of yen appreciation are passed along may be said to be first steps in this direction, and it is crucial that we continue to promote deregulation and these other policies. I also intend to pay all due heed to the report expected from the Provisional Council on Administrative Reform in mid-October on their review of the functional delineation between the private and public sectors, how to redress the harmful effects of our rigidly compartmentalized bureaucracy, and other issues.

If we are to make steadfast progress toward the medium- to long-term goal of reforming our socio-economic structures, it is important that the various policies deployed all move in a single direction in a compatible fashion. I have thus established an Economic Reform Research Council made up of leading private-sector figures and this Council has recently held its first meeting. I have asked this Council to study what modalities are best for Japan's economy and society, what policy measures are needed to get us there, and other issues and to report to me by the end of the year. The results of this review in hand, I intend to move quickly to formulate the necessary policies for building our new socio-economic structures.

In addition, the government also intends to submit the Basic Environmental Protection Bill and the Administrative Procedures Bill to this Session of the Diet. These bills are basic to medium- and long-term policy implementation in the sense of developing comprehensive environmental policies for the future and attaining fair and transparent administration, and I intend to do my best for their prompt passage.

To Be a Trusted Member of the International Community

The international situation today is extremely murky and fluid, and the international community faces a host of difficult issues such as the sluggishness in the world economy, regional conflicts in Bosnia and other regions, concerns about nuclear proliferation in North Korea and elsewhere, the developing countries' troubles with poverty and starvation, and global environmental issues. Yet we have a historic duty to overcome these difficulties and to build a new international order for post-Cold War peace, and Japan intends to do its utmost to fulfill its responsibilities and to become an even more trusted member of the international community by playing an active role in the solution of these global issues.

The Japanese peace-keepers who took part in the UN operation in Cambodia have recently started returning home, and I would like to take this opportunity to offer my thanks and respects for the work that they have undertaken. I believe it is fully consistent with Japan's ideals of advocating international cooperation and aspiring to lasting peace that we actively contribute to United Nations peace-keeping operations under our peace Constitution. With the full understanding of the people, I intend for Japan to steadily do what it can in such UN-centered international efforts for world peace and stability. With the permission of the Diet, I would like to attend the United Nations General Assembly later this month to articulate this determination there and to explain my thoughts on such issues as Japan's approach in its efforts to reform and strengthen the United Nations.

If I am able to attend the United Nations General Assembly and am able to meet with U.S. President William Clinton then, I would hope we could -- two leaders of the same generation, both calling for change -- have an open and honest exchange of views on Japan-U.S. relations and the many problems facing the international community and build a relationship of trust and cooperation between us. It is especially important that Japan and the United States cooperate in the economic sphere to fulfill their global economic responsibilities, and Japan will pursue constructive engagement in the consultations started this month on the Framework for a New Economic Partnership, including bilateral cooperation on the many issues of global significance and including Japan's own efforts in promoting non-inflationary and domestic-demand-led economic growth, improved market access, and other initiatives and seeking enhanced U.S. efforts for addressing its policy agenda, such as reducing the U.S. fiscal deficit and buttressing American industry's international competitiveness.

Looking at the diplomatic schedule for the rest of the year, I see the Tokyo International Conference on African Development in early October and the possibility of an informal leaders conference following the Asia Pacific Economic Cooperation (APEC) Ministerial meeting in the United States in mid-November, as well as Russian President Boris Yeltsin's expected visit to Japan. Likewise, the final adjustments are under way in Geneva and elsewhere in an effort to bring the Uruguay Round to a successful conclusion by the end of the year. Fully aware of the expectations held of Japan, I believe it is imperative that Japan make the utmost possible contribution to world peace and prosperity as an international state and fulfill its responsibilities consistently. On relations with Russia, along with working tenaciously for the resolution of the Northern Territories issue and the full normalization of our relations, I also intend to extend the appropriate support to reform efforts in Russia.

Building upon the dramatic developments in the negotiations for a Middle East peace, Japan also intends to cooperate for the attainment of peace in the Middle East.


From the end of the war until the present day, Japan has driven single-mindedly toward the goals of economic growth and industrial development until we have become referred to as an economic power almost before we knew it. While I have the highest respect for the efforts of everyone who worked so hard during those years, I also recognize that there was much overlooking of the sacrifices made in the name of national development.

I would not be surprised if many of the people are bewildered and wonder why, even though they have worked this hard and Japan has become one of the world's leading economic powers, they still cannot feel they are well off and Japan somehow does not seem to have the respect it should from the rest of the international community. While this effort to fundamentally review and reform the values and systems that we have grown so familiar with over the last nearly half a century will obviously entail some hardship and meet with some resistance, this is a trial that we must come through successfully if we are to ensure ourselves a brighter future in these rapidly changing times.

There is an old saying to the effect that the government is the sails and the people the wind powering the ship of state on the sea of history, and it is now more than ever essential that all of the people raise their voices articulating what direction Japan should travel in the future and that politicians respond to this will. While political reform is an important first step to ensuring that the will of the people finds reflection in national policy, there is a whole host of problems before us, none of which we can afford any delay on. I am determined to move ahead with the people in enacting political reform as soon as possible and in progressing toward a brighter tomorrow in which we can all have a firm sense of a richer future.

I hope all of the people and the members of the Diet will grant me their understanding and cooperation in this effort.