Top �� Speeches and Statements by Prime Minister

(Provisional Translation) Press Conference by Prime Minister Junichiro Koizumi September 27, 2004

Three years and a few months have passed since my inauguration as Prime Minister and today I have reshuffled the Cabinet. Over the course of my term, I have placed much emphasis on the importance of Japan-US relations and also of cooperation with other countries in our foreign policy. That is to say, the Japan-US alliance and international cooperation are the two pillars of Japan's foreign policy. Based on the understanding that the development and prosperity of Japan is linked to the peace and stability of the world, I have actually pursued international cooperation while placing importance on the Japan-US relations. There will be no change to this policy in the future. Turning to domestic affairs, the goal of the Koizumi Cabinet has been to revitalize the economy. Fully aware that Japan will not be able to adapt to the change of the times if it clings to its current systems, I have thus far steered politics on a course under the basic policies of "leave to the private sector what it can do," and "leave to the localities what they can do," in implementing the financial reform, regulatory reform, taxation reform and public expenditure reform. In response to my reform track, it was argued that as Japan is in an economic downturn, experiencing recession, the advancement of various reforms and structural reforms would further deteriorate the economy, rising unemployment rate, not to mention the number of bankruptcy cases. It was also argued that the reforms being implemented by the Koizumi Cabinet were misguided. There were calls that it was not the time for 'without reform there will be no growth,' but that growth should first be sought for a policy of 'without growth there will be no reform.' The debate persisted well into my second year in office as to whether "without reform there will be no growth" or "without growth there will be no reform." However, I believe that the people of Japan now finally understand that the track of "without reform there will be no growth" has proved to be the right one. The economy has recovered in actual terms as the reforms have been advanced, with improvements seen in the disposal of non-performing loans and efforts by financial institutions to regain their solidity. As such, we must continue to push ahead with these reforms. We must proceed in accordance with the policy of the Koizumi Cabinet to, "leave to the private sector what it can do," and "leave to the localities what they can do." The Basic Policy on the Privatization of the Postal Services, which is at the heart of the Koizumi Cabinet's reforms, has finally been approved by the Cabinet and the bills to privatize postal services will be submitted to the Diet next year. People agree to the general concept, "Leave to the localities what they can do." Let's give more discretion to the localities in the utilization of subsidies provided by the central government and transfer tax resources to the localities. Let's reform local allocation taxes which cover the shortfall in expenses that cannot be provided by local governments in implementing projects. Taking state subsidies for example, which state subsidies should the government abolish and entrust to the localities? What kind of tax resources should the government transfer to the localities? The localities would face difficulties if local allocation taxes are cut. Most of the localities wish to receive local allocation taxes and to maintain the current practice. The situation is difficult as reforming one aspect would mean that other aspects must also be changed accordingly. It was out of such circumstances that the Koizumi Cabinet decided to proceed with a reform package consisting of the three difficult issues of state subsides, tax resources and local allocation taxes, which would be tackled together. With regard to state subsidies, the aim is to achieve a reduction of four trillion yen, of which we have succeeded in reducing one trillion yen this year. We will strive to implement reforms for a reduction in state subsidies of three trillion yen in total over the next two years. Together with this is the plan to reform tax resources and local allocation taxes. The major task by the end of the year is to put the reform package of three issues into effect. People have also been in favor of the general policy, "leave to the private sector what it can do." However, in reality, the issue of the three postal services is a good example of "not leaving to the private sector what it is capable of doing." I have never spoken of abolishing the post offices. It was simply a question of whether the operation and services at the post offices must really be carried out by 400,000 civil servants. The operation of postal services could be carried out by personnel other than civil servants. Entrusting services to the private sector would result in diversification of services provided by post offices, without further wasteful use of tax revenue. As such, reforms based on the policy of "leave to the private sector what it can do" are now in full swing at last. The political parties were paralyzed and were unable to move forward when faced with the strong desire and requests by the 400,000 people that are currently working in the postal services to maintain the status quo. However, we have finally reached a stage where we are able to move into these problems. The reshuffling of the Cabinet and executive officers of the Liberal Democratic Party (LDP) have been conducted for the purpose of further advancement of the reforms that we have achieved to date. I intend to continue promoting reforms in accordance with the basic policies. In this, I would like to ask for the genuine support and cooperation of the people of Japan. [Q&A] Question: I would like to ask a question concerning personnel changes within the LDP. What was your intention of appointing Mr. Tsutomu Takebe to the post of Secretary-General and Mr. Shinzo Abe to the Acting Secretary-General, which was conceived as being a surprise appointment? Also, do you believe that you have established a party unity through these personnel changes? Prime Minister Koizumi: In the appointment of the three senior officers of the LDP, my intention was to achieve a structural adjustment within the party. There was already a precedent to change the officers at the time of the reelection of the senior positions. The reshuffling of the Cabinet was also conducted along the reelection of the senior positions. The reshuffle on this occasion was based on ideas such as "it is best to inject new blood to among officials," "it is best to create party unity," and "after House of Councillors election, we should promote reforms with new momentum." With these ideas as a basis I appointed Mr. Tsutomu Takebe to the post of Secretary-General, Mr. Fumio Kyuma as Chairman of the General Council and Mr. Kaoru Yosano as Chairman of the Policy Research Council. Given that the target of achieving 51 seats was missed by one seat at the House of Councillors election, in which, Secretary-General Abe articulated his strong intention to step down directly after the election. Even while feeling that there were still things left for him to do such as in the area of party reform, Secretary-General Abe was determined that he should resign, given his own target of achieving over 51 seats was not achieved. I respected such will, and decided to hand the position of Secretary-General to another person. Even so, I believe that Secretary-General Abe still feels that "for the sake of party reform, I will remain in the party executive and continue to make efforts," and "to date as Secretary-General I have benefited from the support of many people, and from now I will work from a position of receiving opinions of various persons, including the new Secretary-General, and work to support them." I believe he has also made the judgment that, "to stay on as a member of the party executive headed by Secretary-General Takebe is a means of realizing the reforms that I still have left to implement." I highly evaluate his judgments. Secretary-General Takebe has a wealth of experience to date, having served as Minister of Agriculture, Forestry and Fisheries and as Chairman of the Rules and Administration Committee in the Diet. He has gained the trust of political parties and works hard in Diet affairs. Secretary-General Takebe has expended huge efforts in the compilation of the party manifesto in the recent election. In the Diet administration and in reforms, he has a strong sense of conviction that there must be no back-pedaling in the reform track of the Koizumi Cabinet, including the privatization of the postal services. It is for such reasons that I asked Mr. Takebe to take on the position of Secretary-General of the LDP. I think the LDP has a good team now. Question: You said that you intended to gather forces that would cooperate in the privatization of the postal services before reshuffling the Cabinet. From the viewpoint of promoting the privatization of the postal services by reshuffling the Cabinet, do you think that you were able to gather cooperative forces the way you envisioned on the whole? As for my other question, you said when you reshuffled the Cabinet last year that this Cabinet would be named the "reform promotion Cabinet." How would you name this Cabinet? Prime Minister Koizumi: The reason why I have designated the privatization of the postal services at the heart of the reforms is because generally everyone is in favor of "leaving to the private sector what it can do" and private sector is providing similar services to the current postal savings, postal life insurance and mail delivery services. Why these services must be assumed by government officials or civil servants? Why not entrust these services to the private sector? What happens then, however, is that people turn to labor unions or special post offices, saying that they serve as the constituencies for political parties, which depend on them for support during election time. These people favor the status quo and see no need for change. In order to attach importance to these constituencies, most political parties decide to maintain vested interests and favor the status quo. Nonetheless, I have continued to place importance on the privatization of the postal services, considering that government businesses complement private businesses and we should take one step forward and allow members of the private sector to be involved in public sector tasks because they can also perform public services. I am gaining understanding in this regard, and we were able to reach a Cabinet decision. Thus, I will now work toward drafting bills in line with the Cabinet decision. I raised the privatization of the postal services as a major aim during the LDP presidential elections last year. Of course, there were people who were against the idea, but in the end, members of the LDP and the LDP members of the Diet chose me as the LDP President. I held the same stance in the general election last November and the LDP won a majority and has since maintained the coalition government with the New Komeito and managed this administration. Together the LDP and New Komeito have obtained a stable majority in the election of the House of Councillors, thereby attaining a stable majority in both Houses of the Diet. I believe that under these circumstances, the obvious course for me to take is to accomplish this major aim, which I have continued to advocate. I have brought together Cabinet members this time that understand and will cooperate in order to achieve this aim, and I believe that a party unity has been built as a result. Various debates, whether members are in favor or against tend to persist within the LDP until a conclusion is reached. However, I believe that these voices of opposition will eventually join forces toward a certain conclusion, considering the trend of the times as well as the direction that Japan should move in the future. In other words, I believe that even if there is opposition now, these people will agree and cooperate when it comes time to reach a conclusion. Looking at the past three years, even when there were diverse opinions for and against the privatization of the highway-related public corporations, those who were against the idea of the privatization ended up supporting it. Those who were against the idea of the private sector participating in the postal services finally gave their approval. This time as well, I am certain that those who are currently against the privatization of the postal services will support and cooperate when the time comes to reach a conclusion. As such, this policy was finally approved by Cabinet decision and the drafting of bills will now begin. If the role of the Cabinet this time is to finally realize the reform track that has been hitherto advanced, then I believe that it would be appropriate to name this Cabinet the "Postal Privatization Implementation Cabinet" or the "Reform Implementation Cabinet." Question: In this Cabinet reshuffle you have made new appointments to the positions of Minister for Foreign Affairs and Minister of State for Defense. Please tell us the reasons for this shake-up in the areas of the foreign policy and security. Also, could you provide us with an explanation for your appointment of Mr. Taku Yamasaki as Special Adviser to the Prime Minister? He is well-versed in these areas, and tell us if his appointment comes from a desire to enhance policies on diplomacy and security. Prime Minister Koizumi: Both Foreign Minister Yoriko Kawaguchi and Minister of State for Defense Shigeru Ishiba have to date made tremendous efforts in the areas of foreign affairs and defense respectively and have performed their duties faultlessly. In her new position as Special Adviser to the Prime Minister, Foreign Minister Kawaguchi will continue to cooperate with the Koizumi Cabinet, and given the busy schedules of Diet members, I expect that she will continue to provide various supports on issues of diplomacy as a non-Diet member, utilizing her experiences as Minister for Foreign Affairs. The new Minister for Foreign Affairs Nobutaka Machimura already has experience of having served as Parliamentary Vice-Minister for Foreign Affairs and has a wealth of other experience, having served as Minister of Education, Culture and Sports, and as Director-General of the Election Bureau of the LDP. He is someone who well understands the importance of foreign policy for Japan. Minister of State for Defense Ishiba is a person who, as a theorist and polemicist in defense and security policies, has for many a year been ready with an innovative response to difficult issues concerning defense, and he has made sterling efforts in promoting the importance of defense policy. The position of Minister of State for Defense has now been taken on by Mr. Yoshinori Ohno, who has an intricately detailed knowledge of defense policy, having experience serving as the Director of the National Defense Division of the LDP. With the mutual cooperation of these two persons and with a renewed spirit, I believe that we must work to promote security and foreign policy in an integrated manner. Mr. Taku Yamasaki has been appointed to Special Adviser to the Prime Minister, from which position he will provide advice on the whole range of political issues. Given his particularly strong insight in the area of security, I expect that he will be a source of strength for me despite the various difficulties within the LDP itself and I am greatly encouraged by his assumption of this position. Foreign Minister Machimura and Minister of State for Defense Ohno have both studied issues of foreign policy and defense and have a well-grounded knowledge in these areas, and I expect they will be no less active and diligent in their duties than were their predecessors Mrs. Kawaguchi and Mr. Ishiba. Question: Unlike previous Cabinets, the newly reshuffled Cabinet contains no persons from the private sector and the number of women is also extremely small, standing at only two persons. I would like to ask whether you think that the characteristics of the Koizumi Administration will be altered given these changes. Prime Minister Koizumi: I remain eager to utilize the talents of women Diet members to the greatest extent possible. However, looking at the entire composition of the Diet or the LDP, it is a reality that there are comparatively few women. I don't seek to appoint women to the Cabinet just because they are women. Ministers must be chosen for their appropriateness and their ability to do the job at hand. Experience is also very important, and although the number of women in the Cabinet has fallen from three to two, I will continue to try to appoint most appropriate women for the job. With regard to the decrease in private sector members in the Cabinet, Mr. Heizo Takenaka was recently elected to the House of Councillors and has therefore moved from the private sector. Leaving her position as Minister for Foreign Affairs, Ms. Kawaguchi will continue to be active as a Special Adviser to the Prime Minister. My feelings remain unchanged that it is not simply a case of selecting persons from the private sector, but that if a person from the private sector is the right person for the job, then I will utilize their talents. From a private sector perspective, however, becoming a Cabinet Minister entails many restrictions. There are therefore many people who may tentatively consider the idea, only to withdraw. Problems include the requirement to disclose ones assets, resistance from family members, Diet questions, and given all of these makes it difficult to say yes, and is why so many people in fact say no. I think the reality is that given the great difficulties associated with the move from private sector to the political arena including bearing criticism, the number of able persons who would dare to enter the political world is decreasing. Happily there are currently many Diet members who have great insight and are ideal for positions in the Cabinet, and just because the number of private sector members has diminished does not mean that the characteristics or policies of the Koizumi Cabinet will change. The question of how to realize the goals I have set since my appointment as Prime Minister is also important when considering the composition of the reshuffled Cabinet. Over the course of three years, I have benefited from the cooperation of many people. The members of the LDP and New Komeito have understood the importance of structural reforms and although there have been voices of opposition, voices warning caution, and voices of resistance, ultimately I have been able to have everyone's cooperation in reaching the point at which we stand today. To the extent that my term of office allows, I am determined to realize even in some small way the basic policy of "leave to the private sector what it can do" and "leave to the localities what they can do." One large task is the current privatization of the postal services, regarding which the LDP and New Komeito have provided me with the benefit of their cooperation. I will therefore work towards its realization and hold firm to a reform track that will be irreversible. Question: Prime Minister Koizumi, is there a possibility that the House of Representatives will be dissolved or the Cabinet will be reshuffled during the remaining two years of your term in office? Prime Minister Koizumi: At this point in time, the issue is how to promote the reforms that have been advanced so far, and I do not envision a situation where the House of Representatives will be dissolved. What I mean is that a year has yet to pass since the House of Representatives was dissolved, and the election of the House of Representatives was held in November 2003 and the election of the House of Councillors was held in July 2004. Bearing these events in mind, I do not think that the present situation calls for an immediate dissolution of the House of Representatives. As I said earlier, I intend to wholeheartedly strive to realize reform and I am not considering dissolving the House of Representatives at this point in time.