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Transcript of Video Message from Prime Minister Yoshihiko Noda on the Comprehensive Reform of Social Security and Taxation Systems

Friday, February 17, 2012

[Provisional Translation]


People of Japan, I am Prime Minister Yoshihiko Noda.

Today I would like to speak directly to you about my thoughts on the comprehensive reform of social security and taxation systems.

Due to the Great East Japan Earthquake last year, there are now three tasks that our country must undertake. The first is recovery and reconstruction from the earthquake disaster. The second is the fight against the nuclear accident. And the third is the revitalization of the Japanese economy. There is no "magic wand" that will solve these problems. I believe that we must work to overcome them with diligence, one by one.

Actually, from even before the earthquake, Japan was faced with a number of issues. The biggest issue among these was that which I would like to talk to you about now, the comprehensive reform of social security and taxation systems.


Three Points for which Japan Cannot Wait Any Longer

We are at a point where we cannot wait any longer to advance this comprehensive reform in term of three points.

Japan Cannot Wait Any Longer for the Strengthening of Social Security
The first issue is the strengthening of social security functions. We cannot wait any longer on this. Although the birthrate is slightly recovering, the atmosphere related to childbirth and child rearing in Japan is unfortunately not quite favorable. We must quickly put a stop to the trend of declining births. And in order to accomplish this, we need support for children and the generation that is raising them.

Another point related to this issue is - I have recently visited a suburban housing complex outside of Tokyo, where the ratio of elderly residents is 41 percent. Japan's cities are truly aging. Our urgent task is to create a system of community comprehensive care that combines medical and nursing care activities with urban planning measures. We cannot wait any longer on the shift toward a social security system that can give peace of mind to everyone from the young to the elderly - one that covers each and every generation.

Japan Cannot Wait Any Longer for the Creation of Sustainable Frameworks
The second issue is the creation of sustainable frameworks. The foundation of Japan's social security system was created in 1961. The entire population was entered into the pension and insurance systems. In the beginning, we had many working youths to support one elderly person, as if they were tossing someone into the air. These days three working individuals support one elderly person like a mock cavalry battle in which one teammate rides atop the backs of three fellow players. If we look ahead approximately forty years, we reach a point where one person will be supporting one elderly person like a piggyback ride. I want everyone to imagine what this kind of society will be like. If the person on the bottom becomes ill, if they lose their job, what will happen? This is what society will be like after around forty years. Young people now will be the ones who in forty years will be riding on the backs of the working population. I want everyone to sufficiently keep this in mind.

We are now progressing toward becoming an extremely aged society, one unlike any the world has ever seen. In order to cover the increased costs of medical and nursing care, even if we only maintain the current system, costs will naturally rise up by around 1 trillion yen each year. If you were to take this amount in 10,000-yen bills and stack them one on top of the other, the resulting pile would be 10,000 meters high. That is a figure greater than the height of Mt. Everest. And this is the extent to which the cost of social security will naturally rise every year.

Considering the situation we are in, we can no longer live in an era in which the burden of insurance costs are born mostly by those in the prime of life. We must not attempt to reach into the pockets of future generations to borrow money. For this reason, we must introduce an additional consumption tax that will make it possible for the generation alive today to widely and lightly share this burden. We must establish a stable source of funding for social security. We cannot wait any longer on this.

Japan Cannot Wait Any Longer to Act Upon its Credibility
The third issue that we cannot wait any longer to act upon is Japan's credibility. The European debt crisis is not a fire on the other side of the river. There is no telling when the embers of the crisis may reach Japan. I believe that we must maintain a strong sense of the risk it poses. I believe Japan needs to demonstrate through its actions to the people at home and abroad that it has the secure financial resources to sustain social security, or to strengthen it, and that it is a country that maintains fiscal discipline.


What Politics and the Government Should Do

I believe that many in the public are now thinking that there should be something which politics should do before we move forward with this comprehensive reform for which we cannot wait any longer, or which Kasumigaseki should do. We are closely listening to these strong opinions. What we must achieve during the current Diet session is to reduce the number of seats in the Diet, reduce personnel costs for national public servants by approximately 8%, and reduce the number of what used to be called special public corporations but which are now called incorporated administrative agencies by approximately 40%. We will be also addressing the situation of special accounting, about which a former Minister of Finance once said, "General accounting is the main house. Special accounting is a separate residence." In other words, even if one cuts down on expenditures by eating rice gruel at home, outside of the main house they may well be living a life of luxury eating sukiyaki. We will proceed with the reform of special accounting. We will do away with the separate residence and focus on the main house. I am resolved to carry out this reform, ensuring that the public is able to thoroughly keep the government in check.


The Revitalization of the Japanese Economy

We must of course carry out this kind of political reform and administrative reform, and at the same time, we must achieve the comprehensive reform of social security and taxation systems in parallel with the revitalization of the Japanese economy. Working closely with the Bank of Japan, we will exert every possible effort to overcome the rising value of the yen and deflation.


Requests to Each Generation

More than anything, the understanding of the people of Japan is indispensible for the advancement of these comprehensive reforms. Social security is a framework through which the people of Japan support each other across generations. The principle of social security is that there is no provision of services without people to bear the burden for them. If no one pays for services, there will be no provision of services. This is something that I truly want everyone to understand. Until now we have been passing the cost on to future generations. I believe that we must let go of this irresponsible attitude through which we believe that if things are fine now, everything is alright.

Here, I have a request to make to each generation.


To the Baby Boomers
First, to the baby boomers. You have supported the economy and society of this country up until now. You are now reaching the age at which you are beginning to receive pensions. Ten years from now you will be 75. You have always led public opinion in Japan, creating the trends of society, and so I especially want to make a request to you. I ask you to please be considerate of the generations that support your social security benefits, understand the comprehensive reform, and lead in forming public opinion on this issue.

To the Working Generation and the Young
Next, I want to make a request of the working generation and the young. You must support many elderly people, and I believe there are those among you who feel that you are a generation that has drawn a poor lot. However, the people who created the enriched Japanese society of today are those in the generations that came before us, your parent's generation. Japan exists as it does today thanks to their accumulated efforts. Please resolutely inherit the system of mutual support that they have created. And of course, we are determined to achieve reform that allows those supporting the elderly to also feel the benefits of social security.

To those Raising Children, and those Wishing to Work while Raising Children
Next, I wish to send a message to those now struggling to raise children, to "Mom and Dad." And I want to make a request to the many women who strongly wish for a way to balance child rearing and the pursuit of a career. Unfortunately, until now, Japan and the social security system have not paid enough attention to children and the generation raising them. We are exerting every possible effort to create a new system for children and child rearing. You can give birth to children in peace of mind. I want to carry out this reform, with everyone's cooperation, to create a society where women are no longer faced with the problem of wanting to work but not having any place that will look after their children.

The understanding and support of every member of society in every generation is indispensible. With unwavering resolve, we will achieve the comprehensive reform of social security and taxation systems. In concluding my address, I want to again ask the support of the people on this. Thank you.

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