[Provisional Translation]

CABINET PUBLIC AFFAIRS SECRETARY: We will now begin the press conference by Prime Minister Yoshihiko Noda. Prime Minister, your opening statement please.

Opening Statement by Prime Minister Yoshihiko Noda

PRIME MINISTER NODA: Today the bills relating to the comprehensive reform of social security and taxation systems were approved and passed by the House of Representatives. That we were able to achieve the passage of these bills today is thanks to the strong support of the members of our coalition partner, the People's New Party (PNP). Thanks should also go to the members of the Liberal Democratic Party (LDP) and New Komeito Party who provided the benefit of their cooperation when compiling the tremendously important final draft bills through a process of the three-party agreement with mutual concessions made for the sake of the nation. I would also like to thank the members of the Sunrise Party of Japan for approving the bills.

Notwithstanding the current situation of a divided Diet, I believe it to be of great significance that we have been able to take the first step towards such large-scale reforms, which are for the sake of the people of Japan living today, and also give due consideration to future generations. However, now that the bills have been passed by the House of Representatives, deliberations will move to the House of Councilors. I will brace myself with a greater sense of urgency than ever as the deliberations move to the House of Councilors, and seek to achieve the enactment of the bills during the current session of the Diet. This is what I am resolved to do.

The significance of the comprehensive reform is, above all, that it will make the social security system sustainable. We will enhance what needs enhancing, and provide stability to those areas that require stabilization. This is the most fundamental reason for why we are engaging in this reform.

No one in Japan knows at what point in our lives we may need to receive social security services. Whether it be in times of trouble and hardship, or when experiencing difficulty in child-raising, seeking employment, dealing with illness and injury, or living in retirement, at all of these times everyone in the nation should be able to receive social security services. They are truly a part and parcel of the daily life and livelihood of the people. The system of providing universal pensions and universal health insurance, which was launched half a century ago, and which forms the backbone for social security, is truly a system that is among the best in the world.

However, regrettably it is the case that the declining birthrate and aging of society have advanced rapidly and the significant changes to the population structure mean that reform is essential. This is the point that we have reached. A particularly grave issue is that the number of people who support the system has been declining. The current working generation and the generation currently engaged in child-raising are experiencing difficulties, and there is a limit to the degree they can support the social security system in Japan as it currently stands. It is not just the current working and child-raising generations, but rather that we have reached a limit to the degree we can place a burden on the future generations that have yet to be born and expect social security to continue to function. The situation of social security reform is such that it cannot be put off any longer. In addition to securing stable financial resources for social security, another significant point about the comprehensive reform is that it will also restore fiscal health. By stable financial resources I refer to consumption tax.

It is a difficult thing to request the people of Japan to bear a burden. As a politician it is truly a bitter task to have to ask the people to bear a burden, including small, medium and micro-enterprise business owners, who toil each day to manage their businesses, and all the people who endeavor to make ends meet in their household finances. If bearing this burden could at all be avoided, anyone would seek to avoid it. However, if everyone is to enjoy the benefit of receiving social security it is essential that some people support the system. The major point of the reform on this occasion is that the burden will all be returned to the people in the form of social security. It is my heartfelt wish to receive the understanding of the people with regard to this point.

The reform is being referred to as a comprehensive reform of social security and taxation systems, but in actual fact it is a broader and more comprehensive reform. There have been some discussions that in a situation in which the economy is not looking too healthy and is a cause for concern, it would be better to not raise consumption tax. What we need to do is not to adopt such a passive attitude, but instead mobilize various policies with a strong resolve to strengthen the economy in order to push through the comprehensive reform, and then make efforts to overcome deflation and reactivate the economy.

There are also discussions that it would be preferable to make further efforts to eliminate waste and engage in other things that need attention before increasing tax. It is indeed true that we must engage in reforms that involve sacrifice, directly affecting legislators and the government, In order to gain the understanding of the people of Japan, we must press forward resolutely with administrative reform, political reform and the reduction of the number of Diet members. However, if we only embark upon the comprehensive reform of social security and taxation systems once all these other things have been done, we would be unable to respond to the situation in which the reform can no longer be put off. I believe that we must proceed with and implement all manner of reforms-social security and tax reform, economic revitalization, and administrative and political reform-by the time the consumption tax rate is set to be raised to 8 percent in April 2014.

Has it not been the case before, that based on the logic of doing something after first doing something else, we have missed the opportunity to make a decision at the crucial point? The kind of politics that I wish to engage in makes the necessary decisions, reaches conclusions, and avoids delays and procrastination. The passage of the bills today in the House of Representatives is, I believe, a significant step in that direction.

Regrettably there were some dissenters in the ruling coalition, from within the Democratic Party of Japan (DPJ), the ruling party. Yesterday in the meeting of Diet members of the DPJ, I urged for unity and that we engage together in efforts to carry through this reform. The result today was therefore an extremely regrettable one. The DPJ is a political party, and therefore there is naturally a party line that should be followed. We must respond to this situation. I will consult thoroughly with the Secretary General of the party and respond sternly, in accordance with procedures prescribed by the party.

What we in Government must do is not limited to the comprehensive reform of social security and taxation systems alone. In September last year, at the time of the inauguration of the Noda Cabinet, I announced priority tasks, which were reconstruction from the Great East Japan Earthquake, the fight against the nuclear power station accident, and the revitalization of the Japanese economy. In addition to these fundamentally important challenges, there are many other issues that Japan currently faces, which could well be said to constitute a national crisis.

Politics should not flinch in the face of a national crisis, but rather should stand and face it. Politics should not seek to avoid themes that divide public opinion, but rather should make decisions and move to implement them. That is the kind of political path that I seek to tread.

The current session of the Diet has been extended for 79 days. I would like to conclude my statement by stressing my resolve to spare no effort to ensure that during this extension of the Diet session, we are able to find solutions to the various challenges we face. Thank you.

Q&As

CABINET PUBLIC AFFAIRS SECRETARY: We will now move on to the Q&A session. When you are called on, we would appreciate it if you could first state your name and affiliation. Mr. Sato, please.

REPORTER: I am Sato of Nippon Television.

You have just expressed your intention to deal sternly with the dissenters within the party, and both LDP President Sadakazu Tanigaki and Secretary General Nobuteru Ishihara have been quick to state that their cooperation in deliberations in the House of Councilors concerning the comprehensive reform draft bills, including the draft bill on the consumption tax increase, is premised on the dissenters being penalized harshly. It would appear that there were 57 dissenters, or opponents, within the party, which is a very large number. Are you considering expulsion from the party as a penalty, which is the harshest penalty possible under the regulations of the DPJ?

Another question pertains to whether the party is considering imposing the penalty immediately or waiting for a certain period. Could you tell us what your thoughts are about how quickly any penalty will be imposed?

PRIME MINISTER NODA: First of all, the response that will be made within the party is an issue that relates to governance by the party itself. Other political parties have no right to intervene. It is ultimately a matter for the DPJ to decide how it should respond.

With regard to the response that will be made, there are party rules in place. The executive body of the party will make a proposal, which will then be decided and approved by the Standing Officers Council, with the Ethics Committee being consulted. These are the rules that will be followed, and before that, at the stage when a proposal is to be issued, I would like to come to a decision after thorough consultation with the Secretary General of the party. Discussions on the specific content of the penalties to be imposed will take place from now, and it will be necessary to assess the case of each person one by one, which will take time. Although it will take time to examine in detail who opposed or approved which bill and the reasons behind the various decisions, we will not make the process a long and drawn out one.

REPORTER: Basically the Diet members who support Mr. Ichiro Ozawa were opposed to all the bills. Are you considering all kinds of penalties, without ruling out the possibility of expulsion from the party?

PRIME MINISTER NODA: As I have stated, we will make a stern response.

CABINET PUBLIC AFFAIRS SECRETARY: Next, please. Yes, Mr. Yumoto.

REPORTER: I am Yumoto of Yomiuri Shimbun.

My question is on the dissolution of the House of Representatives. With a large number of House of Representatives' members dissenting, former DPJ President Ozawa has not denied the possibility of forming a new party, and there is a realistic chance of a no-confidence motion being passed if submitted. Without rendering it as mere speculation, can you discuss whether you will dissolve the House of Representatives if a no-confidence motion is passed, that is, whether you are prepared to do so?

PRIME MINISTER NODA: A new party or a no-confidence motion - these matters are just too speculative, no? I believe they are. I will seek the public's verdict after I have gotten through what needs to be done. My basic stance remains unchanged that I will seek the public's verdict when the timing is appropriate.

REPORTER: Timing-wise, are you thinking before the end of the current Diet session?

PRIME MINISTER NODA: The timing for what?

REPORTER: The timing for seeking the public's verdict.

PRIME MINISTER NODA: This will happen after I have gotten through what needs to be done.

CABINET PUBLIC AFFAIRS SECRETARY: Next, Ms. Sekiguchi, please.

REPORTER: I am Sekiguchi of Dow Jones.

You have repeatedly stated that you will put your political career on the line for the comprehensive reform. However, now with the proposal almost sure to pass at this Diet session, will you still attempt to be reelected in the DPJ presidential election to be held shortly after the closing of the Diet session? If so, can you discuss what your priority issues will be?

PRIME MINISTER NODA: I believe we are getting too far ahead of ourselves.

Although you said it is certain that the proposal will pass at this Diet session, the House of Councillors will start deliberating the proposal from now, and I will exert every effort toward its passage with a sense of urgency. I have no intention of being overly optimistic when managing Diet affairs. There are many other themes besides the comprehensive reform which need to be dealt with. During this Diet session, I hope to pursue these themes thoroughly with a sense of tension. In this context, with regard to the DPJ presidential election and so on, I have not yet thought that far ahead. In any case, as we are in a position with responsibility for the people's livelihood and economic and fiscal matters, I will thoroughly carry through responsible actions for the people during this Diet session.

CABINET PUBLIC AFFAIRS SECRETARY: Next, Mr. Kano, please.

REPORTER: I am Kano of Sankei Shimbun.

My question is about DPJ Secretary General Azuma Koshiishi. Do you believe that the responsibility for the large number of dissenters lies with Secretary General Koshiishi? What are your thoughts on this, including your own responsibility? Do you intend to keep Mr. Koshiishi in his current post?

Also, I have one more question. Mr. Koshiishi said that when Mr. Ozawa, Mr. Koshiishi, and you met, over the course of discussion it was said that there would be neither dissolution nor party division. Was this discussed among the three of you? I believe such discussion may have served as a "go" sign to party members to cast dissenting ballots. How do you conceive of this?

PRIME MINISTER NODA: First, with regard to your former question, I believe this is not a matter of who is responsible. Although the results were regrettable, we must take firm steps to move forward. Going forward, I would like to bring the comprehensive reform proposal to the House of Councillors for its passage, with the party leadership sharing responsibility.

As to your latter question, it was not a promise or commitment of any kind. I believe it is not suitable for one to comment on the content of what was said by others. However, in relation to what the Secretary General said, he stated that it is better if the party is thoroughly united. Everybody agrees with this. We confirmed this at that point in time and discussed if there were any wise ways through which we could manage to work together.

Regarding the timing of the election, I said earlier that this will be after I have gotten through what needs to be done. In this sense, I said not yet (at the meeting with Mr. Ozawa and Mr. Koshiishi). We shared our recognition on these matters.

CABINET PUBLIC AFFAIRS SECRETARY: Next, please. Yes, Mr. Sasaki.

REPORTER: Going back to the issue of dealing with dissenters, you stressed that you would respond sternly to this issue, but this group has opposed important bills for which you, the Prime Minister - the representative of the party - have said you would put your political career on line. There is strong outcry within the party to expel these individuals. If the past practices of the DPJ were followed, the strongest response would be to suspend the party membership of the Diet members that opposed the bills. Is this what you intend to do?

PRIME MINISTER NODA: We are not yet at a stage where we can talk about the details. The bottom line is that I will respond sternly to the issue.

CABINET PUBLIC AFFAIRS SECRETARY: Next, please. Mr. Fujita.

REPORTER: I am Fujita of NHK.

The administration's political footing has been weakened by the large amount of dissenters. In your comments in the Diet yesterday, you noted that it would be in the best interest of Japan and its citizens for the DPJ to work together with the LDP and New Komeito Party on specific policy issues. Moving forward, do you intend to run your administration by reaching a revised agreement among the three parties and building a cooperative relationship with the two parties? Also, do you intend to seek a so-called partial alliance, where parties collaborate on individual policy issues? Please answer these two questions.

PRIME MINISTER NODA: I take a very orthodox stance on this issue. In a divided Diet, both the ruling and opposition parties must move forward by reaching a firm agreement. This can sometimes be like passing a thread through the eye of a needle-it is something that requires a lot of patience, but the reality is that things do not progress unless the work is done. Amidst these circumstances, there have been several examples where compromise by the parties for the sake of Japan and its people has allowed for productive results. One such example is this comprehensive reform. The comprehensive reform has been a major topic, and this is an example of the parties working together.

Examples can also be seen in the response to the Great East Japan Earthquake last year. Considering these examples, I intend to continue discussion between the ruling and opposition parties while steadfastly searching for other areas of potential policy cooperation. There are still - one issue in particular is the special measures for government bonds, which should have been handled with expenditures and revenues. There are thus still issues to be addressed, and I will continue to work towards a conclusion on these issues through serious dialogue between the ruling and opposition parties.

CABINET PUBLIC AFFAIRS SECRETARY: We are running out of time, so the next question will be the last. Yes, Mr. Takada.

REPORTER: I am Takada of Fuji Television.

Just now, Mr. Ichiro Ozawa, former head of the DPJ, responded to questions from a group of reporters. When asked about holding a discussion with you, he asserted that the DPJ and the Government should return to the original principles of the manifesto. He added that if you feel the same way, he would be happy to talk with you. I am sure that you have not forgotten the original principles of the manifesto, but please indicate whether you intend to express understanding with regard to Mr. Ozawa's comment about returning to the original principles of the manifesto, and whether you are prepared to engage in such dialogue.

PRIME MINISTER NODA: It is my intention that I always take into consideration the original principles of the manifesto in holding the lives of the people of Japan before anything else. Furthermore, I do not understand why this divergence in perception has been brought up in relation to the comprehensive reform. The DPJ has continued to pour energy into social security, an issue directly related to the lives of the people, since it rose to power. The comprehensive reform aims to propel the issue further forward. I have no sense that I have strayed from the original principles of the manifesto. I will consider carefully whether to hold discussions with Mr. Ozawa.

CABINET PUBLIC AFFAIRS SECRETARY: With that, I will bring the press conference to a close. Thank you very much.