OPENING STATEMENT BY PRIME MINISTER SHINZO ABE

PRIME MINISTER ABE:  Five years ago, we retook the reins of government through the support of the Japanese public. At the time, there was severe criticism towards the bold monetary policy that we had set forth in our pledges. However, we were able to transition into execution precisely because we emerged victorious in the general election. By firing the three arrows of Abenomics, we got rid of the stagnation in the Japanese economy and to a sizable degree turned negative growth into positive.

Right now the Japanese economy is enjoying its sixth consecutive quarter of positive economic growth for the first time in 11 years. Robust economic growth led by domestic demand is being realized. Employment has increased by close to two million people and this spring, the employment rate of newly-graduating university students was the highest ever recorded. Over the last two years, the number of workers with regular employment contracts increased by 790,000 while the ratio of job offers to job seekers for permanent positions exceeded 1 for the first time since the survey began. People who wish to work as a permanent employee can certainly find more than one job offering permanent employment.

I have continued to fire the arrows of reform under Abenomics for close to five years and finally we have succeeded in coming to this point. Now is the time for us to take on the greatest walls we face.

Can Japan, with its rapidly progressing aging society and falling birthrate, really grow going forward? We will reliably offer answers in response to this vague sense of unease. Those answers are the productivity revolution and the human resources development revolution. For Abenomics, these two major reforms will be the biggest tests of all. Upon receiving the support of the public, I intend to compile a new economic policy package within 2017.

We will make the trend of increased wages, attained four years in a row, even more robust and sustained. Towards that end, it will be necessary to increase productivity. Robots, the Internet of Things, artificial intelligence, and cutting-edge innovations that dramatically boost productivity are now poised to change the world dramatically. It is Japan leading this productivity revolution that comprises the greatest pillar of our next Growth Strategy. Positioning the three years until fiscal 2020 as a period of intensive investment towards the productivity revolution, we will vigorously stimulate capital investments and investments in human resources by companies, including small- and medium-sized enterprises and micro enterprises. Through bold reforms to the tax system, the budget, and regulations, we will mobilize all possible policies and measures in order to realize a productivity revolution.

By boosting productivity, we will substantially increase people’s incomes going forward, with next year’s being higher than this year’s, and the following year’s higher still. We will accelerate to the maximum degree the speed at which we move towards pulling out from deflation.

The other major pillar will be the human resources development revolution. Children’s latent possibilities are infinite. We will implement reforms to create a society in which everyone with ambition can advance to vocational college or university, no matter how financially disadvantaged their family background. I am determined to definitely make higher education effectively free for children from low-income households, in cases in which such assistance is truly necessary. In addition to expanding measures to reduce or eliminate tuition fees, we will substantially increase the allowance provided through scholarships that do not need to be repaid, which were initiated this month, in order to cover all necessary living expenses.

We will ensure opportunities for everyone, no matter their age, to brush up their skills and take on new challenges. With our eyes firmly fixed on an era of one hundred-year lifespans, we will radically expand recurrent education, which will be the key. In order to meet such needs, we must also press forward vigorously with reforms to universities.

We will also make a big push forward in one stroke towards making preschool education effectively free. By fiscal 2020, we will make kindergarten and nursery school expenses effectively free of charge for all children between the ages of three and five. We will also make all expenses effectively free for children up to two years old from low-income households. The determination of the Abe Cabinet in aiming to eliminate childcare waiting lists is unshakeable. We will accelerate implementation of the Plan for Raising Children with Peace of Mind drawn up this past June and prepare childcare arrangements for 320,000 children by fiscal 2020.

We will prepare nursing care arrangements for 500,000 people by early in the 2020s. The biggest issue is securing nursing care workers. Until now the LDP-Komeito administration has improved wages by 47,000 yen monthly, but we will press forward with further improvements in treatment in order to eliminate the wage disparity with other industries.

Child rearing and nursing care. By boldly committing policy resources to eliminating these two areas of great unease facing the working generation, we will dramatically shift Japan’s social security system to become a system oriented to all generations. Against the backdrop of the rapidly progressing aging society coupled with a falling birthrate, I am determined that we must execute these now by gaining the support of the Japanese people. We will achieve these major reforms by carrying out new policies at a scale of 2 trillion yen.

However, we must not pass down the bill to future generations. I have taken the decision that we must use the financial resources derived from raising the consumption tax rate to 10 percent, scheduled for October 2019, as stable financial resources in order to vigorously advance the human resources development revolution. A two percentage point rise in the tax rate will generate tax revenues exceeding 5 trillion yen. Under the current plan, only one-fifth of those tax revenues will be used for enhancing social security, with the remaining four-fifths, an amount exceeding 4 trillion yen, to be used to pay down debt. This way of thinking is the premise for raising the consumption tax rate from 5 to 10 percent and is something that we pledged to the public. I boldly seek to change the way these consumption tax revenues are used. We will appropriate the tax revenues in a well-balanced manner to investments to assist families with small children and to the stabilization of social security. We will at the same time also realize with certainty the rebuilding of public finances. That is the path I will pursue. Rather than using the increased tax revenues only to pay down debt, by shifting a larger amount to expenditures for measures to address the low birthrate and other matters, we will also be able to lessen the negative impacts on the economy like those that occurred three years ago when the rate was raised to 8 percent.

On the other hand, it will be difficult to attain the target of achieving a surplus in the primary balance in fiscal 2020. However, the Abe administration will not lower the flag of fiscal reconstruction. We will firmly maintain the goal itself of aiming to achieve a surplus in the primary balance. We will continue to undertake reforms from both the expenditure and revenue sides and draw up a concrete plan for achieving this in the future.

In order to overcome this greatest issue of a dwindling birthrate within an aging society, I have resolved that we will take on the challenge of undertaking major reforms to Japan’s socioeconomic system. And, in order to enhance our investments in families raising small children, today I made the decision to review the way in which we have pledged until now to use consumption tax revenues. Insofar as I have changed the pledge made to the public and taken a major decision related to people’s daily lives, I decided it is imperative to promptly seek a popular mandate. I will dissolve the House of Representatives on September 28.

I think the public harbors a great deal of unease at the repeated provocations by North Korea. The government will at all times do its utmost towards crisis management and protect the lives and the property of the Japanese people. This is a matter of course.

At the same time, it will not do for elections, which are the starting point of democracy, to be influenced by North Korea’s threats. To the contrary, by holding an election at such a time as this, I wish to ask the public regarding our response to this North Korea issue.

With the successive launches of ballistic missiles flying over Japan and the conducting of a nuclear test, the provocations by North Korea have quickly escalated and the threat has truly become something real. In this context, I have repeatedly held dialogues and consultations with the leaders of naturally the United States and the Republic of Korea, as well as China, Russia, India, Europe, the Middle East, and Asia in order to make our solidarity with the international community even more robust. And the other day, the UN Security Council took a unanimous decision on strict sanctions, including export restrictions on crude oil and petroleum products. First of all, we will fully implement this. Moreover, if North Korea does not change its policies in this area, we will intensify the pressure on North Korea further, alongside the international community.

North Korea has an industrious labor force and also enjoys abundant resources. If North Korea walks the correct path, it will also be able to grow its economy rapidly. However, without resolution of the abduction, nuclear, and missile issues, there will be no bright future for North Korea. We must cause North Korea to change its policies. The pressure we exert on it is for that purpose.

Some hold the opinion that there is a risk that intensifying pressure will cause North Korea to have an outburst, and that we should change our approach to instead engage in dialogue. No one the world over hopes for conflict. But there is no meaning in having dialogue only for the sake of dialogue.

Over the last 20 years, Japan and the rest of the international community has made repeated efforts to bring about a peaceful resolution through the Six-Party Talks and other forms of dialogue. During that time, North Korea twice committed to abandoning its nuclear and missile programs, but it ultimately failed to keep its commitments each time, and its nuclear and missile development has continued.

Efforts towards dialogue were used to buy time. We must make North Korea abandon all nuclear and ballistic missile programs in a complete, verifiable, and irreversible manner. If North Korea does not accept that, then I am convinced there is no way forward other than to continue to maximize the pressure on it using every possible means.

And, we will demonstrate leadership within the international community and make our utmost efforts towards resolving the abduction issue.

It is exactly because North Korea is intentionally fuelling tensions right now that we must not waver. We must not do anything that would be like giving in to North Korea’s threats. I will advance robust diplomacy upon gaining the public’s trust through this election. I intend to take a resolute approach to North Korea, together with the international community.

During the recent Diet session, the sale of state-owned land to Moritomo Gakuen, the establishment of a veterinary department by Kake Educational Institution, and other such issues were discussed, inviting a great deal of distrust from the public. I myself made efforts on a number of occasions to explain the situation thoroughly, including by attending off-session Diet deliberations. I intend to continue to take that approach into the future.

In this election campaign, opposition party criticisms may focus on these matters. An election undertaken in the midst of this will be a truly rigorous one indeed. I am already prepared for that. However, I cannot move forward on major reforms that will split public opinion without having the public’s vote of confidence. I will not be able to advance resolute diplomacy in order to safeguard our national interests, either. I am determined to defend this country until the end through receiving a vote of confidence from the public.

I will demonstrate strong leadership towards situations that should also truly be called national crises, namely the dwindling birthrate alongside our aging society and the tense North Korea situation. I myself will spearhead our efforts as we confront these national crises. This is my responsibility as the head of government and my mission as the prime minister. I have decided that, even if it should be a tough election campaign, it is imperative, regardless, to listen to the voices of the public in order to together overcome these national crises together with the Japanese people.

This dissolution of the House of Representatives is a dissolution to achieve a breakthrough regarding our national crises. We will overcome the rapidly progressing aging of society and shrinking of the birthrate to open up Japan’s future. We will defend to the end the lives and the peaceful daily lives of the people against the North Korean threat. I am determined to devote myself body and soul to achieving a breakthrough on these issues that should also be termed national crises, together with the Japanese people.

I will end my remarks here.