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Introduction
Nine months have passed since I was designated as Prime Minister on 24 September last year. Today I should like to speak to all of you about a society providing peace of mind which I seek to achieve.
No matter what I speak about today, the first question from the press is likely to be on the dissolution of the Lower House. So I had better speak on this topic first. Today I will not tell you when I shall dissolve the Diet, but the date will probably not be so far off.
There is one thing that must be done before dissolving the Lower House and calling a general election. This, I believe, is to show people a roadmap towards a society which provides peace of mind to its members.
During my time in office I have done everything in my power to help protect people's daily lives from the unprecedented economic crisis. I feel that we are beginning to see the results we hoped for, as I shall explain shortly in some detail.
However, this is not enough to bring peace of mind to the people of Japan. I believe it is necessary to present to them a vision of and a roadmap to a society which provides peace of mind to its members. This is the topic I will speak about today.
1. Protecting people's daily lives in the face of the economic crisis
(1) Unprecedented recession and extraordinary countermeasures
First, I will look back over the past nine months.
Since taking office, I have focused all my energies on a single area: economic and stimulus measures. This is because I feel that extricating Japan from the economic crisis is the best way to give peace of mind to the public.
We are in the midst of an international financial and economic crisis of a kind that comes but once a century, and there is recession on a global scale. On 15 September last year, Lehman Brothers, a major American securities company went bankrupt. This marked the beginning of the global spread of the so-called subprime loan problem, and fears over the financial sector spread quickly. Thereafter the impact on the real economy grew more severe, and now such globally renowned companies as General Motors and Chrysler have also failed. As a result, Japan has also plunged into a recession of a kind unprecedented in the post-war era. I believe the most pressing task today is to prevent the bottom from falling out of the real economy.
To safeguard people's daily lives from economic disaster, we have drawn up a very wide range of economic measures. During the last nine months, we have passed four budgets. This is unprecedented. In these budgets, we gave particular emphasis to protecting people's daily lives and employment. Rather than focusing on traditional public works, the economic countermeasures have been shaped to protect people's lives. We listened to the views of as many people as possible and are moving swiftly to implement the measures. This is my basic policy stance.
(2) Leading the world
The present financial and economic crisis began in the US, and it is taking place at the same time on a global scale. It is not a crisis that Japan can overcome alone. At the emergency Group of 20 Leaders Summit on Financial Markets and the World Economy held in Washington, DC, last November, and at the G-20 London Summit in April this year, I stressed the need for the world's nations to deal with this crisis in collaboration:
E In order to clear away non-performing debt, it is in some cases necessary to inject public funds [into financial institutions];
E There is a need not just for monetary measures, but also for bold fiscal spending;
E In order to bolster the funding available to the International Monetary Fund, we shall provide a loan of 100 billion dollars, or around 10 trillion yen;
E Learning from the Great Depression of the 1930s, we must not allow individual nations to go down the protectionist route.
The other participating countries endorsed these points which I stressed, and they are now implementing their own countermeasures.
(3) Bright signs
Thanks to these serious efforts concerning economic countermeasures, we are beginning to see some bright signs in the economy. The fixed-sum stipends are now being distributed around the country, and many households have already received their payments. There were many criticisms of this scheme, but we have also heard a lot from people who are very pleased with it.
The eco-points system and subsidies for purchases of eco-cars have also created a lot of public enthusiasm. The other day I visited a major electronics retailer, where I was told that sales of energy-saving, large-screen televisions and refrigerators that are eligible for eco-points receipts have risen to double, 200 percent, of last year's levels.
A number of advance indicators, such as corporate production levels, have rebounded and are rising. Indices also show that bankruptcies have begun to decline. As a particularly visible example, [the Nikkei index of] share prices were once as low as 7,000 yen--I believe the figure was 7,050 yen--but they are up near 10,000 yen again, a rise of some 40 percent. This is one achievement of the last nine months.
However, we cannot yet say that the economy has recovered. The employment situation remains serious, as seen in the unemployment rate which rose to 5 percent in April. We must continue to implement stimulus measures without letting up and pour all our energy into steps to protect people's daily lives.
2. A society providing peace of mind to its members which I seek to achieve
I should now like to talk about the society which provides peace of mind to its members which I seek to achieve. Public anxiety goes beyond economic prospects in the short-term. Many people are concerned about a variety of things. Following defeat in World War II, we in Japan created a society of affluence and equality through remarkable economic growth. Our affluence and peace of mind were a source of pride to us as Japanese. But hidden in the shadow of this confidence, some of the seams were coming undone. This is evidenced, for instance, in issues such as the working poor, the NEET [Not in Employment, Education or Training] population, and more recently children living in poverty and a shortage of doctors. We must frankly admit that the government has not been able to deal sufficiently with these issues. This is what has brought about public anxiety and sense of helplessness.
The worst thing to do would be to close our eyes to these problems, to run away from them. We must have a vision and roadmap, and then realise them. This, I believe, is the role of politics.
(1) Peace of mind
Just recently, on 15 June, the Council on Achieving a Society which Gives Its Members Peace of Mind issued its report. This report offers a blueprint for a society providing peace of mind to its members which Japan should seek to achieve, and describes the path towards it.
In the future, a society which provides peace of mind to its members cannot be created along the same lines as those we have followed in the past. In the affluent society we enjoyed so far, the fundamental question has been how to achieve economic growth, and how to redistribute the fruits of this growth. The question had simply been a dualistic division between breadwinners and beneficiaries.
The society which provides peace of mind to its members which I seek to achieve is one that has to be built by each one of us. Peace of mind is not something granted to us. We must create it ourselves. When I say a "society which provides peace of mind to its members", this does not mean a passive society in which people are pampered. Rather, it is a society in which roles and responsibilities are shared by each one of us. It is a society in which people, across the generations, support and trust each other, in their families and in their communities.
I think you have been given copies of the report, the main points of which are as follows:
i. Peace of mind through job security
The starting point of peace of mind and social vitality is employment, or working. The lack of an opportunity to work or unstable employment deprives people of peace of mind in their everyday lives. Until recently, the low unemployment rate and the practice of lifetime employment kept these problems from coming to the fore. It has become clear, however, through the rise in the unemployment rate and the disparities in employment conditions in recent years that employment is in fact the basic source of peace of mind among members of a society.
Education is another important factor. Disparities in education levels are creating inequalities in people's living standards. We will ensure that children can receive proper education regardless of their family background. Job stability starts with education.
The Report indicates that there are five important areas which bring peace of mind to the public. Employment and education are given in addition to the three areas which have conventionally been considered important--medical care, pensions/nursing care and child-rearing. And I believe that employment is the linchpin, as written on page 55 of the Report.
ii. Providing seamless support
The second point is to construct a system to provide seamless support to people in their various stages of their lives, i.e. for all generations. Until now, the social security system in Japan has been built primarily for seniors, i.e. around pensions and nursing care. The experience of recent years, however, shows that the support for the young and those of working age are inadequate and that this creates insecurity in their everyday lives. Public spending on the young and those raising children is lower in Japan than in other developed countries. In other words, we need a social security system that supports people seamlessly throughout their lives, from childhood to old age.
iii. Reviving trust
The third point is the need to revive trust in government. Mistrust of politics and public administration is causing anxiety over social security. The public is concerned whether the taxes they have paid are being used properly for their benefit. The government must address such anxiety and mistrust. To this end, I believe we must make it easier for the people to understand the burden they bear for social security and the reassurance gained in return.
For example, we will produce and distribute to every citizen a Social Security Handbook which explains in a simple way the benefits and services people can receive at each stage of their lives as they study, work and bear and raise children. We will also distribute social security cards so that every citizen can gain swift, certain access to the support they need.
These are the main points regarding a society which provides peace of mind to its members. The Report provides more details and outlines the path by which we will achieve these points, so I hope that you will read it.
(2) Vitality
Turning to the other pillar, a vision for providing society with [economic] vitality, I have consistently stated that our priority in the near term is to implement economic countermeasures, in the mid-term to rebuild public finances, and in the mid- to long term to achieve economic growth through reforms.
It is difficult both to implement economic countermeasures and to rebuild public finances at the same time. That is why I have set a clear temporal axis. For the time being, we are putting all our energy into implementing the economic countermeasures.
Once the economy has recovered, we will next make clear the path towards rebuilding public finances. We set a new target for restoring fiscal health in Basic Policies for Economic and Fiscal Management and Structural Reform 2009 (Basic Policies 2009) adopted by the Cabinet on 23 June.
In the mid- to long term the priority is economic growth. In April we formulated a Future Development Strategy, which is a new growth strategy, and are making investments for the future, such as in the low-carbon revolution.
The Future Development Strategy, announced in April, and the report of the Council for the Realisation of a Reassuring Society, prepared in June, constitute a map which shows the way to achieve a society which provides peace of mind to its members. I should like to bring about such a society based on them.
The Basic Policies 2009, approved on 23 June, includes concrete and priority measures based on this thinking. The keywords are "reassurance", "vitality" and "responsibility". I am confident that I have presented the public with an overall view of my policies in concrete terms. We must win the coming general election and continue to take responsibility for putting these policies into practice.
3. The political changes I shall introduce
Many among the Japanese public are dissatisfied with politics in this country. This is because Japanese politics is not meeting public expectations. I believe we must reflect seriously on this matter. There is no magic, nor is there a silver bullet that will restore people's trust in politics. The only way is to answer each one of the people's dissatisfactions and demands.
Many people often say that politics must change. They are right. But merely playing with words like these leaves only a feeling of emptiness. What, specifically, should be changed? What goals should we set, and what path should we take to achieve them? I believe that trust in politics will return only when we clarify these points. The ruling parties must do this and translate the goals into reality. We have the responsibility to do so. Of course, profligacy without considering the revenues to be allocated, or setting forth an array of contradictory policies is unacceptable. A governing party cannot do anything as irresponsible as to promise services without the necessary revenues to pay for them.
It is nine months since I took over the reins of government. I am sure that many wise people have noticed that we are currently making major changes to the nature of policy and politics.
(1) Government that meets people's expectations
First, I have made a clean break with the simple view that the pursuit of small government is the supreme goal. During the past nine months we have implemented economic countermeasures on an unprecedented scale. The scale of the budget for this fiscal year, if you include the supplementary budget, exceeds 100 trillion yen. The lesson of the current financial and economic crisis is that in certain situations all cannot be left to market functions. I have no hesitations about the government coming to the fore in such cases.
However, this certainly does not mean simply aiming for big government. The government's role will expand in order to meet public expectations--to provide social security that gives peace of mind to the public, for example, and to regulate and supervise financial institutions. When implementing policies, however, it is better for the government to play a small role and to harness the power of the private sector as much as possible. Rather than making a simple choice between big and small government, my aim is to have a functioning government, a simple government that treats the people warmly.
(2) Administration focusing on the consumer
We have also made a major change of course from administration that favours producers to that focused on consumers. In the economic countermeasures, we have placed emphasis on protecting people's daily lives. I remember that public works used to account for about 50 percent, about half, of outlays in economic countermeasures of the past. By contrast, I believe that the ratio of public works spending in the fiscal 2009 supplementary budget is lower than 20 percent. It is about 16 percent.
An Agency for Consumer Affairs will be launched in September. Since the Meiji era, the central mission of Japan's administration has been to support producers. The Agency for Consumer Affairs will also serve to reverse this concept.
(3) Responsible government
The other quality that is required in politics today is responsibility. In my press conference on 30 October last year, alongside my announcement of economic countermeasures, I advocated the need to raise the consumption tax. Everyone dislikes a tax rise. However, spending on social security is rising at a rate of about 1 trillion yen every year as a result of Japan's ageing society with a declining birth-rate, and there is no way to cover such social security expenditures without raising taxes. A failure to address this problem would mean leaving debts to our children's and grandchildren's generations. I believe it is the responsibility of politicians to speak even painful truths to the people.
That is why, in our Mid-term Programme, we have made clear that in three years, provided that the economic situation will have improved, we will undertake a fundamental reform of the tax system. And we have written into law that we will return all of the funds collected through the tax rise to the people by using them for social security and measures to address the declining birth-rate.
As a basic precondition for asking the people to shoulder this burden, we must of course undertake ceaseless administrative reforms and thoroughly eliminate wasteful spending. Neither I nor the Liberal Democratic Party (LDP) will shy away from difficulty. We will show the people our vision of the society we aim to achieve and translate this vision into reality. We will aggressively reduce administrative waste and end the practice of facilitating amakudari [re-employment in the private sector] of civil servants. And if necessary, we will ask the people to accept a tax rise.
Conclusion: The changing LDP and politics to be changed
In closing, I should like to say the following. The LDP shall change. It must change. I believe we must change the politics of Japan. As I have just said, we must recognise that the public is dissatisfied with politics in Japan.
I also recognise that the government and the LDP cannot escape responsibility for this. The LDP has shouldered the politics of Japan for many years. As well as our contributions to success, we must recognise our responsibility for failure. I have no intention whatsoever of saying that the LDP has always deserved full marks.
History shows, however, that every time a problem was identified, the LDP reformed itself and overcame the challenge. Now we need to make even bigger changes and reforms. The LDP shall change. I will change the politics of Japan. It is the will to change in order to safeguard Japan that will make Japan a strong and bright nation once more. I, Taro Aso, and the LDP are responsible for the next step in this development. We take responsibility. It is the LDP that will protect people's daily lives and protect Japan. On this note I would like to close my speech.
Thank you for your attention.
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