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In this regular session of the Diet which began in January, a vigorous discussion took place over the long period to the end of July. Thanks to cooperation by all, including many Diet members in the ruling coalition, we managed to endorse a number of legislative bills. We also received various criticisms during the session. Amidst voices that were raised stating that the Koizumi Reforms had failed, or that they were not progressing, or that they were no good, I would like to sincerely thank many of the people of Japan who have encouraged and supported me in the hope that the Koizumi Reforms would be made a reality.
This Diet session was one during which a number of scandals were revealed. A number of issues were raised, such as the relationship between politics and money, the relationship between politicians and bureaucrats, and how the bureaucracy should be run. It was under such circumstances that vigorous discussions took place concerning what action would be necessary for politics and politicians to gain the trust of the people, and also what reforms of systems would be required. During this Diet Session, a bill providing punishment for politicians who receive compensation for acting as go-betweens in arrangements between private parties and public officials, in the form of a bill that extends to covering secretaries of politicians, and also a bill relating to the prevention of bid-rigging in order to improve the situation concerning suspicions surrounding the bidding process, were both successfully compiled. I believe that there still remain a number of tasks concerning@how politicians should procure funds for their political activities and what practices are desirable for political donations to politicians. It is incumbent upon us to continue our efforts towards further improving the situation, by making serious deliberations on these issues that have been raised during this Diet session.
Furthermore, during this Diet session we successfully compiled the bill relating to medical system reform, which is deeply related to the daily lives of the people of Japan. The contribution rate of patients insured by Society-managed Health Insurance is set to increase from 20% to 30% and this has brought criticism that it will cause pain to the people. However, the medical insurance system is nothing other than an amalgamation of three contributions - contributions by the patients, contributions from people who are not ill but pay their insurance premiums, and the contribution from the tax revenue of the nation as a whole. The question of what medical benefits to provide and how to spread contributions will continue to be an important issue. The contribution rate of 30% for patients insured by Government-managed Health Insurance has been set from before. For people only to look at the fact that the contribution rate for these insured by Society-managed Health Insurance is increasing from 20% to 30% and thus that pain is being imposed upon the people is a total misconception.
We will continue to examine what constitutes the appropriate contribution from insurance premiums, from taxes, and from patients, as well as the provision of medical benefits. Through this process we will set a direction for improvement and elucidate a number of issues to be tackled towards reform, and we must advance ever forward in our reforms.
In this context, various issues concerning medical treatment fees also need to be discussed, including doctor's treatment fees and what compensation is necessary for these medical operations. Two types of payment have been discussed - retrospective payment and prospective payment. In the former, the payment is made based on the actual cost, whether it relates to medical examination, medical treatment, or drugs. The latter type is for chronic illnesses, where the medical cost is estimated on the basis of previous experience, and a fixed payment is made. Retrospective payment is the total contribution for each medical examination, medical treatment and drugs, and prospective fixed payment is where the amount of payment is fixed according to the type of illness. There are good points and bad points to both of these types of payment. I believe that based on this point, improvements must be made in search of higher quality and more effective medical treatment that cover medical treatment fees, and retrospective and prospective payment.
Next is the issue of the pricing of drugs. Some companies manufacture cheaper drugs that are just as effective as more expensive ones. If the effects and effectiveness are the same, then I believe we should make it customary to use the cheaper drugs. The issue of drug pricing is one where there is room for improvement.
I would next like to speak about the issue of medical care for the elderly. The number of elderly people will continue to grow. At the same time, the population of young people, those who are healthy but bear the burden of this cost, whether in the form of tax or insurance premiums, is falling. It is a fact that the older one grows, the higher the likelihood that one will become ill. Also, old people tend to suffer from more than one illness. In an environment in which the number of elderly people is increasing, when we consider the degree to which young people will be able to reasonably bear such a burden, I do not think that system of medical care for the elderly is satisfactory as it currently stands.
The insurance system is also divergent and separated. I believe that if we were to rationalize and unify it, we might be able to create a more effective medical care system. For this and other drastic reforms, by the end of this fiscal year we must elucidate one direction as a template and implement specific measures accordingly.
We have already developed a world-class medical care insurance system through which all the people are able to select their own doctor or change doctors regardless of where they are or who they are. In order to maintain and develop this system of universal insurance, and make the medical insurance system sustainable and even better, I am committed to continue to make endeavors towards reform.
Again, I would like to emphasize that it is a complete misconception to believe that the increase in contributions from 20% to 30% will merely impose pain upon the people of Japan.
In addition, as part of structural reform, with regard to the problem of special public institutions;
as for the problem of the privatization of the Japan Highway Public Corporation, it is incumbent upon us to see that a third-party body is established so that tax revenues are used in the least wasteful way possible in future. We will build the roads that are necessary, but not those that are considered wasteful, or those that will be underused, or in cases where it may be possible to maintain standard roads instead of building an expressway. We must weigh their necessity, building methods, and whether or not they are worth spending tax money on, and I do not think the present Japan Highway Public Corporation is best at doing this. Given this situation, a policy of privatizing the Japan Highway Public Corporation has been proposed since last year, and the legislation for the future commissioning of the Japan Highway Public Corporation to a third-party organization was endorsed during this Diet session. A seven-member committee was finally selected for this purpose and dynamic discussions are underway.
I intend to go on making efforts for policy making on how we should realize the privatization of highway cooperation on the bases of the vigorous discussions of this committee and their conclusions.
Then there is the Postal Public Corporation Bill, a bill to promote the entry of the private sector into the postal services businesses. Although some say that this bill is insufficient, the Postal Public Corporation Bill has been passed and the Postal Services Agency will be relaunched as the Postal Public Corporation from April next year. I regard this as the first major step for the big reform in the future.
Many members of the opposition parties and also members of the press have suggested that the Postal Public Corporation Bill is insufficient in its current form and have been critical that more discussion should be undertaken towards more drastic reform and for privatization. However, this bill is the basis for the creation of the Postal Public Corporation, and the foundation of the bill was already decided before the inauguration of my administration. This was a bill that faced much opposition in the Diet, but thanks to the cooperation and the concerted efforts of the ruling coalition parties, it has now been passed. From now on, moving forward from the point in time when the Postal Public Corporation Bill was passed, aiming at the creation of the Postal Public Corporation in April next year, I would like to take a step towards the heart of the reform, the fully fledged privatization of the three postal businesses.
I would like to initiate reforms from this month, those that go to the heart of structural reform, ranging from postal savings and postal life insurance, to the Fiscal Investment and Loan Program, covering special public institutions as a whole. Boldly and openly, I will carry on the discussions concerning privatization.
First of all, I would like to see the head of the new Postal Public Corporation appointed from the private sector. With the recognition that the Postal Public Corporation is intended as a preparation for privatization, I would then like to see reforms towards the full-scale privatization of postal businesses.
Since I was appointed Prime Minister in April last year, there have been criticisms that the reforms of the Koizumi Cabinet have been nothing more than rhetoric. I am convinced that reforms are still advancing in accordance with what I have said..
As I stated in my first policy speech to the Diet, the campaign of a zero waiting list for nursery schools has already been implemented in each region, and through the establishment of public childcare facilities operated by private bodies and the participation of non-profit organizations (NPOs) and corporations, we are steadily progressing with the policy of reducing to zero over a period of three years the 150,000-child waiting list for nursery schools. Over the course of just one year we have been able to place 50,000 children in nursery schools.
With regard to education also, the Koizumi Cabinet would like to put further efforts into education, a subject to which Japan has always given emphasis.
I believe education is one of the most important which contributed to the development of Japan to date. The answer to how Japan, with no resources of its own, has developed to the point it has today lies in the emphasis that has been placed on education. This has been due to the fact that we have developed excellent human resources. I fully recognize that in the reforms we undertake from now, the most important issues will be human capabilities, human resources and their improvement. Improving the quality of teaching is important. And people who have no formal teaching qualification, but have a wealth of experience in the region, the members of the society, could offer support in schools as assistant teachers. They would sweat together with pupils and in this way serve for their education. With regard to this issue, there were a total of 3,000 members of society acting as assistant teachers and participating in the educational arena in FY2001. I would like to see increased participation in schools by active members of society who have an enthusiasm for education, with a target of 30,000 assistant teachers for this fiscal year. This plan is steadily being advanced.
For the sake of pupils, there is proficiency-dependent teaching. There is nothing more painful for pupils than suffering in classes which they do not understand at all. With proficiency-dependent teaching, teachers will enthusiastically teach the pupils until they understand. Those children who understand well will advance further. I would also like to see proficiency-dependent classes. Children having difficulty understanding class would be taught in a way allowing them to understand through small-group education and proficiency-dependent classes. They should proceed in a way whereby bright children can really extend their capabilities.
Another issue to be raised is that of the environment which would be of great concern to the entire world. In my first policy speech to the Diet after my appointment as Prime Minister, I held up a policy to make environment protection and economic development compatible. Although there were concerns that if environmental issues are advocated, this would have a negative effect on economic development. That will no longer be the case. Scientific and technology are progressing. Preserving environment and promoting economic development in a compatible way has been the policy that I have advocated and pursued. Since my appointment, I have announced that the 7,000 governmental vehicles will all be replaced by low-emissions vehicles, and this policy is also being steadily progressed.
Private sector companies are actively engaging in development of low-emissions vehicles as the Government is ready to purchase such vehicles even though the prices for these are relatively high, and thus competition in the development of these vehicles has progressed beyond forecasts.
It has been said that the ultra-clean energy that is the fuel cell, which powers a car using hydrogen rather than gasoline, was a long way away. However, Toyota and Honda have already announced that they will have a fuel cell car model on the market by December this year. If brought to the market, the Government will swiftly purchase such vehicles from any company, and in order to spread clean energy and low-emissions vehicles and to realize an environmentally-friendly society, it will actively purchase products that take environmental concerns into consideration. Japan intends to lead the world in this area by showing that environmental protection and economic development are in fact compatible with each other.
The 2002 FIFA World Cup co-hosted by Japan and the Republic of Korea, concluded as a resounding success thanks to the efforts of many of the people. Although insecurity was pointed to from the outset concerning the issues of terrorism and hooliganism, now that the World Cup has finished, we can see that counter-terrorism and anti-hooliganism measures were carried out skillfully, and I would like to offer my deepest thanks to all security offices involved.
Moreover, through the World Cup, Japan and the Republic of Korea have deepened their ties of friendship and the tournament created a momentum for the promotion of friendly relations between the two countries through sports exchanges. A lot of Japanese people of course supported the Japanese players, but they also generously cheered on teams and players from various other countries, The World Cup this time was highly appreciated by other countries which made it a wonderful tournament.
From now on as before, not only through football, but also through many sports exchanges, I would like to further develop the friendly relationship between Japan and the Republic of Korea, as well as with the rest of the world.
The issue of food safety in the wake of the Bovine Spongiform Encephalopahty (BSE) crisis aroused much concern and criticism among the people of Japan. Recently consumption of beef has returned to the levels it was at prior to the outbreak of BSE. I will continue to deliberate on the issue to make sure due consideration is given to measures to improve food safety.
The Government of Japan will continue to pay maximum attention to the issue of economic revitalization. Although the issue of the disposal of non-performing loans is also a very difficult one, with the introduction of the payoff system (capping the blanket guarantee of deposits at private banks) near at hand, I would like to ask financial institutions to continue making efforts to restore the trust of the people in the sound management of these institutions. I would like to see the inspection system for non-performing loans fully established and thorough measures taken to ensure that financial crises would never take place.
Urban renaissance is something that the Koizumi Cabinet has been placing emphasis on, although criticism has been leveled that this has been at the expense of the regional communities. This is not at all the case. As one example of an urban renaissance project that has been undertaken this year, I would point out Sapporo, a city of more than one million and the city with the heaviest snowfall in Japan. As part of the urban renaissance project in Sapporo, it should not waste the energy provided by snow. Would there not be a possibility for the city of Sapporo to consider taking measures to make use of snow for thermal energy around the city? I would like to take measures towards a Sapporo renaissance project that transforms snow into energy. With the cooperation of the city of Sapporo I would like to put all efforts behind this project.
Then there is Sendai, which although being famous as a city of forests, does not necessarily reflect this reputation in its actual urban environment. Efforts have been made to change this and make this famous reputation somewhat more fitting. In Sendai there is an eight-lane highway. This highway is to be narrowed to a six-lane highway and the area of the previously used lanes will be utilized to plant one million trees. Sendai is undertaking such a project that cherishes the landscape while placing importance on the environment.
In Hiroshima, the Ota River was considered for an urban renaissance project that makes use of its riverbanks, while taking the landscape of the city into consideration. I would like to see urban renaissance projects promoted where natural endowments such as snow, forests and rivers might be utilized while preserving them at the same time.
Furthermore, tax reform will be one of the significant pillars of reform in the FY2003. On the subject of fundamental tax reform, until now, we have had a system of single fiscal year tax neutrality, that is to say, if there has been a tax reduction on one hand, then tax has had to be increased elsewhere on the other. We will change the current practice of bringing expenditure in line with revenues over a single fiscal year. First, while considering comprehensively the global economic situation and Japan's economic situation, and looking at the status of expenditure reductions, budget formulation and the economy, I will proceed with tax reform allowing for tax reductions in advance that will contribute to fiscal soundness over the course of several fiscal years. Concrete discussions are being undertaken in the Government Tax Commission, the Tax Research Commission of the ruling parties and the Council on Economic and Fiscal Policy (CEFP), and through effective collaboration among them, I would like to realize a tax reform towards appropriate economic revitalization.
Concerning the relationship between national and local governments, I aim to produce a draft for reform that could get started in the next fiscal year, through a comprehensive deliberation on the issues of local allocation tax, subsidies, and the transfer of fiscal and tax resources to local governments. Of course these issues are not ones that can be achieved in one or two years, but I will earnestly investigate a draft that can bud within the budget formulation for the next fiscal year. I would like it to be reflected in the budget formulation for FY2003.
Of course, the greatest objective of the Koizumi Cabinet is that "all that can be done by the private sector should be left in its hands, and all that can be done in the regional communities should be left in their hands." Now we start the reform towards the privatization of the postal businesses, which is at the heart of the principle that all that can be done by the private sector should be left in its hands. This is a juncture for Koizumi Cabinet reforms to get on the track.
There are many people in Japan who have lost their self-confidence lately. I was watching the NHK program "Project X" the other day, and as I learned about the transformation of Tokyo Telecommunications Engineering Corporation to Sony Corporation as they developed their business globally, I was very much impressed by Japanese people's spirits and efforts.
In those days, they strove to sell the Sony transistor radio in New York, in the United States, in Germany, even though Japanese products carried a reputation of being cheap and low quality. These unknown brand transistor radios developed into a global business. Looking at the legacy of the toil of the founders, Mr. Ibuka and Mr. Morita, and of the efforts to transform the company into a world enterprise, we should be proud of our people.
Also, with regard to automobiles, during the time our generation were children, there were very few people who imagined that Japanese cars could foot it with American cars and sell in the United States, the home of the motor car. Today, companies such as Toyota and Honda are selling their automobiles in the United States and around the world, due to their good qualities.
And just two or three days ago in Scotland in the United Kingdom, the home of Scotch whisky, a British whisky magazine held a whisky tasting contest, and Japanese whisky brands Nikka and Suntory placed first and second! When we see these achievements, the efforts of Japanese people and their challenging spirit impress me.
Above all, criticizing Japan as hopeless is never enough; on the contrary, the Japanese economy's potential holds firm. Looking back on the legacy left by the efforts of all the people who picked themselves up from the ashes of World War II, I am filled with determination that, we should carry out with confidence the required reforms towards the revitalization of the economy.
At the moment in the Kansai region, where a high unemployment rate and economic recession are talked of, a group of 20 or 30 small parts manufacturer plants have come together with a plan to launch a satellite in three years. I believe that we should encourage and support people of such ambitious endeavor. I renew my recognition that the Koizumi Cabinet holds itself accountable for the reform and I am determined to proceed towards substantive reforms, through strengthening the economic base as soon as possible and engaging in nation-building that will inspire the trust of the world.
I would like to request the support and cooperation of the people of Japan in this endeavor. Thank you very much.
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