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[Opening Remarks by Prime Minister Taro Aso]
1. New Economic Countermeasures
On the 27th of March, the budget for fiscal 2009 and its related bills were enacted. I have stated that the foremost economic countermeasures would be the early enactment of the budget. Through this enactment, the "three-stage rocket" of economic countermeasures is now complete.
The first and second supplementary budgets of fiscal 2008, which are already being implemented, have achieved significant results.
For example, there have been some 500,000 cases to date of small and medium enterprises taking advantage of financial assistance in the forms of emergency credit guarantees and special loans, for a total of 10 trillion yen of assistance implemented. I believe this has led to the job security of over 3 million workers.
Employment adjustment subsidies are funds to support companies that do not dismiss workers. These subsidies have successfully helped to maintain the employment of 1.87 million workers.
As for highway tolls in the regions, [a new toll structure of] "a maximum of 1,000 yen on weekends and holidays, regardless of the distance travelled" was introduced on the 28th. A large number of people have already taken advantage of this.
The budget of the new fiscal year will come in addition to these.
In order to defend people's daily lives, we will be putting particular emphasis on countermeasures for unemployment, the securing of a sufficient number of doctors and addressing deficiencies in emergency medical care, childbirth assistance, and other such areas.
In addition, we have increased tax revenues allocated to local governments by one trillion yen and incorporated various policies and measures to assist the regions and companies.
It will be necessary to frontload their implementation so as to generate the effects at as early a time as possible. I ask for the cooperation of the local public authorities as well in this matter.
However, Japan is currently in a situation that can be called an economic crisis. For that reason, we will be formulating new measures to boost the economy.
There are basically three things that must be done. First, we must prevent business activity from slumping further. Second, we must secure employment and ease the pain of the people. Third, we must ensure that these efforts lead to a reinforcement of Japan's future growth potential.
As countermeasures for business activity, it is necessary to expand demand while also attaching importance to the need to provide peace of mind. We will make the peace of mind of the general public rock-solid. This calls for a reinforcement of employment, social security, child-raising assistance, and other areas.
In addition, it is important to invest in new fields in order to lead to growth into the future. Clearly, this is the time for the government to play its role and for public finances to move into action. We will engage in the greatest possible efforts with bold thinking, not to be constrained by what has happened thus far.
The government and the ruling coalition will lose no time in compiling these and I will then present them to the public.
2. Strategy for Growth
Next, I will speak about a strategy for growth. Beyond the short-term economic countermeasures, medium- to long-term economic growth will be necessary. We are now working to indicate clearly and in concrete terms a vision of the future and our goals regarding what kind of economy and society we aspire to have, and are drawing up a scenario on how to bring this about. Then, through the public and private sectors acting in synergy, we will create new markets and new employment. We intend to compile this as quickly as possible.
The first area of the strategy is on the "low-carbon revolution". The areas of the environment and energy are sectors in which Japan is the strongest in the world. We will lead the low-carbon revolution with Japan's technologies-for example, solar power and eco-friendly automobiles.
The second area of the growth strategy is on bringing about a society of good health and longevity. You are aware that Japan is the fastest ageing country in the world. For that very reason, I intend to bring about in Japan an ageing society that is vibrant and positive. For example, we must ensure that workers can work with better hope at nursing care centres.
The third area is on exhibiting Japan's appeal. With its safety and its culture, Japan has "tourism resources" that are internationally competitive. What's more, aspects of Japan's "soft power"-our anime (animation), fashion, J-pop and so on-rank among the most impressive in the world. Unfortunately, these are not currently linked in with international businesses. I hope to infuse the regions with vitality and increase employment for youth by connecting Japan's appeal and its latent power and vitality to industries.
In addition, this growth strategy for the medium to long term cannot be formulated only by looking at the domestic scene. It is important to have the perspective of going beyond national boundaries and promoting growth across Asia as a whole. For this reason, Japan will utilise ODA and private capital to support the expansion of regional demand through the development of region-wide infrastructure in Asia. I intend to spearhead the promotion of these efforts on the occasion of the East Asia Summit that is scheduled for Thailand in April.
3. Towards the London "Emergency Summit"
Tonight I will be departing for London. An "emergency summit" on the world economy and financial markets will be convened, with the heads of state and government of over twenty countries gathering. As you know, the first such summit was held in Washington, DC last year in November.
At that time, the point I advocated on the swift disposal of non-performing loans and international collaboration concerning the supervision and regulation of financial markets was incorporated into the Joint Statement, and countries are already moving forward in their implementation.
For example, consider the disposal of non-performing loans. I have been saying that Japan's experiences in the 1990's indicate that if capital injections into financial institutions are to accompany the disposal of these loans, it is absolutely essential that the assets of these institutions should be valued in a strict and fair manner, and to give incentives for that turnaround. The measures for financial stability recently announced in the US are in line with these principles. I welcome this and hope that they are implemented as soon as possible.
In addition, regarding the stringency of the global financial markets, I announced Japan's readiness to provide a loan of US$100 billion to the International Monetary Fund, and just recently we concluded the formal agreement on this offer.
After this the European Union followed suit and agreed to provide a loan of approximately the same amount. At the forthcoming summit, by making further proposals, Japan intends to play a leading role in facilitating the smooth supply of funds necessary for the global economy.
Furthermore, finance for imports and exports has also been tightening up globally. This is because credit is contracting. If this is left unaddressed, import and export transactions themselves will contract. For that reason, Japan intends to provide support, making use of trade insurance and trade finance.
At the London Summit, consistent with such basic principles, I intend to exert leadership so as to deepen the discussions and to bring about further concrete results.
Conclusion
Finally, although the budget of fiscal 2009 has been enacted today, a number of important bills remain. These include the Anti-Piracy Measures Bill addressing piracy in Somalia and other areas, the bill on the Agency for Consumer Affairs, and the bill that would bring stability to fiscal resources for pensions. Each of these is essential for people's daily lives or in duly contributing to the international community. I will devote my utmost efforts for the early enactment of these bills.
Tomorrow, 1 April, is the beginning of the new school year and the new fiscal year. I am sure that there will be many "freshmen" at schools and many new workers in the workplace. Along with your great hopes, you may feel a dose of anxiety. I believe that we must make your futures bright ones. The reasons I have taken on the heavy responsibility of Prime Minister are purely to bring vitality to Japan and to create a society in which people can enjoy peace of mind. I am prepared to dedicate myself body and soul to achieving these.
My fellow citizens, shall we not move forward with hope?
Thank you very much.
[Q&A]
QUESTION: Today, you gave instructions on new economic countermeasures. Within the ruling coalition, there is a growing call to submit to the Diet at an early date a draft supplementary budget proposal of fiscal 2009 that would provide the fiscal backing for those countermeasures. First, I would like to ask whether or not you personally are inclined to submit this during the current Diet session.
In addition, if it were to be submitted, would you attempt to have it enacted during the current Diet session? Also, please tell us also about the timing of submission, the scale of the draft supplementary budget and other such information.
PRIME MINISTER TARO ASO: Today I, together with New Komeito Chief Representative [Akihiro] Ota, directed the government and the ruling coalition to formulate a set of economic countermeasures at as early a time as possible before the middle of April, in light of the current economic situation. This will entail the submission of a supplementary budget.
The timing of the submission and the scale will be determined by the specific contents of the countermeasures, so the total scale [of this budget] is not determined at this point. Once the budget is submitted to the Diet, we will be exerting our utmost efforts to ensure that it is enacted as swiftly as possible.
QUESTION: I would like to ask about the Japanese government's reaction should North Korea fail to desist from launching a ballistic missile under the guise of a "man-made satellite". Insofar as differences in views concerning a North Korean missile launch can be found even among the permanent members of the United Nations Security Council, what assertions will the Japanese government be making at the UN? Also, are there any plans to push for a resolution of some sort at the UN Security Council?
PRIME MINISTER TARO ASO: Obviously, a launch of rockets or missiles by North Korea would jeopardise the peace and stability of Northeast Asia. Needless to say, a launch would also violate existing UN Security Council resolutions.
North Korea should first of all desist from carrying out the launch. This is obvious. All are in agreement regarding that point, including the US, the Republic of Korea, China, and Russia. Furthermore, Japan's position has already also been communicated to North Korea. At the London Summit as well as elsewhere, it will naturally be imperative to reaffirm our close cooperation with the leaders of the countries gathered. Despite that, should North Korea fail to desist from the launch, I believe that first of all it would be necessary to hold thorough discussions at the UN Security Council. It is inappropriate for Japan to comment lightly when we still are uncertain as to how the launch would actually take place, but we intend to engage in discussions with the possibility of a Security Council resolution in mind. This is entirely natural. What I consider to be of essence, of paramount importance is that the international community should act with full cohesion.
QUESTION: I would like to ask you about rebuilding government finances.
Just now you spoke of mobilising public finances without being constrained by what has happened thus far. Does this mean that you have abandoned the goal of attaining a surplus in the primary fiscal balance by fiscal 2011, which you stated during your policy speech to the Diet that you would strive to achieve?
And if that is indeed the case, then I would like to ask what course you then intend to take in rebuilding government finances.
PRIME MINISTER TARO ASO: We consider the goal of balancing the budget in [fiscal] 2011 as fundamentally one of our most important policy banners, and therefore it is a banner that we must continue to raise.
However, realistically speaking, in looking at the situation in which we currently find ourselves, we cannot deny that the circumstances are becoming extremely difficult. With regard to fiscal reconstruction, as I have stated from the beginning, we must focus on reviving economic activity for the coming three years. And then, in the mid-term we will rebuild public finances. I would therefore like you to understand that I first place top priority on reviving economic activity.
QUESTION: I would like to inquire about two points.
You have stated that it is worth considering reductions in the gift tax, with the aim of stimulating consumption by encouraging transfers of assets while the donors-to-be are still alive. I believe it is widely said that making revisions to the tax system in the middle of the fiscal year is quite difficult. However, in considering additional economic countermeasures or a supplementary budget, will you be coordinating with the Liberal Democratic Party (LDP) Research Commission on the Tax System on various options that include tax system revisions in the middle of the fiscal year? That is my first question.
My other question is on fiscal reconstruction. You had stated in October of last year that if economic recovery were to be achieved at an early date you would raise the consumption tax rate after three years. There is also talk of submitting a bill as early as next year regarding a consumption tax raise in concrete terms, or rather, what the structure would be when the raise takes effect, even if the tax rate itself is not to be specified in this bill. I think these have become difficult in the current situation, but I would like to know what you now think on these points.
PRIME MINISTER TARO ASO: First, on the gift tax. As you know, the total of Japan's household financial assets is said to reach approximately 1.4 quadrillion yen. And this is just the total of assets which are officially known. It is also often said that a large portion of this amount is held by the elderly. I believe that it is extremely important to examine how these financial resources could be utilised, or in other words how they could be used for the creation of demand. For that reason, I should like relevant persons, including those on the LDP Research Commission on the Tax System, to examine what possibilities exist.
As for the consumption tax, which concerns the fundamental reform of the tax system, at the end of last year the Cabinet approved what is called the Mid-term Programme concerning social security and public finances from tax revenues, and a law was enacted that lays out a course for the future. Included in that was a commitment to establish necessary legal measures by fiscal 2011 in order to effect fundamental reform of the tax system, including that of the consumption tax, in stages and without delay, subject to the achievement of economic recovery by that time as a result of intensive efforts aimed at economic recovery within three years, including the current fiscal year.
The practical aspects of tax system reform-by that I mean the specifics of the reform, such as the percent by which taxes would be increased-need to be stipulated in a separate law. This is obvious. At that time, the Diet would deliberate the specific form of the tax system.
That is not to say that the course already set forth will be altered. In mobilising bold fiscal outlays, faithfully demonstrating responsibility over public finances over the medium term is the starting point of a responsible government and ruling parties, and is furthermore a point of pride.
QUESTION: Just now, you mentioned that you would be exerting your utmost efforts towards the enactment of a supplementary budget. Would it be correct to interpret that to mean you will not call a general election through the dissolution of the Lower House until the supplementary budget is enacted? Or, does it mean you may decide to do this if the right time has come, even if the supplementary budget is still being deliberated?
PRIME MINISTER TARO ASO: The answer is what I've been saying all along. You may have anticipated that I may give a different answer in light of the situation now. As I have been saying, I have been serving in this position for the past half a year focusing on policy rather than politics, placing the revival of economic activity first.
With regard to dissolving the Lower House I have also been stating that I will take a decision when the appropriate time has come, and that I will be the one to take that decision. It is not possible to state at this point in what type of situation that would be taken.
QUESTION: As a point of confirmation regarding the timing of the dissolution of the Lower House and subsequent general election, you said during interviews on television and elsewhere at the beginning of March that it was not sufficient merely to talk about additional economic countermeasures and the timing of the dissolution, and rather that actual follow-through was necessary. To reconfirm, would it be correct to understand that, having heard you say just now that you intend to submit to the Diet a supplementary budget of fiscal 2009 and have it enacted, the circumstances appropriate for dissolving the Lower House will not arise until the supplementary budget is enacted?
PRIME MINISTER TARO ASO: Your question is essentially the same question as the previous one in different wording, and it would be unseemly to give exactly the same answer as before. Since I am being asked in a way that involves various changes in wording, it might also be appropriate for me to vary the phraseology in my answer, but the content remains the same. The decision will be made by none other than myself. And, as far as the timing is concerned, it is necessary to assess various aspects of the situation, such as what responses [by the opposition] will emerge concerning the enactment of the supplementary budget, whether [they] will agree to this budget, judging it to be suitable, or whether they will rather oppose it, and whether there will be support or opposition to its content, including to tax reductions. In the event of adamant opposition, we would need to decide, amidst the circumstances prevailing at the time, whether we should enact the supplementary budget in any event, even if this requires sixty days, or, whether it would be better to go to the polls with what we consider to be the best proposal, even if this means calling off [Diet deliberations]. I will decide, based on the prevailing circumstances at that time.
(ends)
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