After years of stagnation following the burst of the bubble economy, the Japanese economy is now in a critical phase for establishing a new modality for growth. In the face of an unprecedented phenomenon of population decrease, we must work on a full scale on reforms to sustain our economic growth and enhance our quality of life.
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The Cabinet made its decision today on the "Economic and Fiscal Reform 2007," which lays out a scenario for our efforts for 1) Enhancing growth potential, 2) Establishing an administrative and fiscal system for the 21st century, and 3) Realizing a sustainable and safe society.
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Moving forward, I will put the Economic and Fiscal Reform into concrete action, placing particular emphasis on the following points:
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| i) | I will work on a full scale on the enhancement of productivity so that we can realize growth amid declining population. In this, I will steadily carry out a comprehensive strategy that encompasses reform of regulations and systems that inhibit the ingenuity and innovation of the private sector, promotion of information technology (IT) among small and medium enterprises, and revitalization of each region as a whole.
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| ii) | To further open our economy, I will positively work to strengthen our efforts for economic partnership agreements (EPAs) negotiations, reform financial and capital markets and realize the Asian Open Skies.
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| iii) | I will effect the Integrated Reform of Expenditures and Revenue as a wheel sharing an axel with our efforts to enhance growth potential. I will seek a full reduction of expenditures in the FY2008 budget as well, pursuant to the Basic Policies 2006. Furthermore, full-fledged discussions will commence from fall of this year on fundamental reform of the taxation system, including the consumption tax.
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| iv) | The state infrastructure that has long sustained our country's development has begun to expose its institutional fatigue, as reflected in the problems surrounding the nation's pension records and the frequent occurrence of collusive bidding involving public offices. To fulfill my responsibility, I will tackle these issues head-on and carry out reform in a sincere manner.
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The Government will bring together all its forces to advance reform under the Economic and Fiscal Reform . In this, I ask for the understanding and cooperation of the people of Japan.
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