Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

REPORTER:I have a question concerning tax increases for reconstruction. The Government and the Democratic Party of Japan (DPJ) are providing the same explanation that the total revenue from reconstruction-related tax increases will be 9.2 trillion yen over the course of 10 years. This is different from the 11.2 trillion yen that is stated in legislation. How do you intend to secure fiscal resources to ensure that the total tax increase is kept to 9.2 trillion yen, instead of 11.2 trillion yen stipulated in the legislation?

CHIEF CABINET SECRETARY FUJIMURA:The agreement reached between the government, DPJ and the People's New Party yesterday is basically no different in content from the draft that was agreed two days ago. In the event that efforts are made to secure fiscal resources through non-tax revenues and other means, and these are ultimately secured, from that point thereon the framework for fiscal resources for reconstruction would be revised, incorporating the fiscal resources that would have been secured. Over the course of 10 years non-tax revenue and revenue through other means would rise over time to 7 trillion yen, resulting in a total tax increase of 9.2 trillion yen. However, for the first five years, which will be a period of concentrated reconstruction efforts, the amount of fiscal resources secured through expenditure reduction and non-tax revenues is based on limited-time measures that are premised on securing approximately 5 trillion yen. It is for this reason that at the start of this five-year period the draft bill for limited period taxation measures stipulates a figure of 11.2 trillion yen.

REPORTER:So what you are saying is that at the starting point for the tax increase measures is 11.2 trillion yen, but if non-tax revenues are added, the final figure will be 9.2 trillion yen. How will you secure revenues to ensure the 9.2 trillion yen figure? Will this be stipulated in law?

CHIEF CABINET SECRETARY FUJIMURA:In the agreement reached between the Government and the ruling parties, the extra 2 trillion yen would be achieved through the sell-off of government-held shares. With regard to the shares held in Japan Tobacco Inc. (JT), the Government will consider the Government's relationship and involvement in the tobacco-related industry as well as considering revisions to the Government's obligation to hold shares. In addition, also with regard to the shares held by the Government under the Special Account for Energy, by considering the modalities for shareholding based on the perspective of Japan's energy policy, the Government would seek to sell-off as quickly possible those shares that it is possible to sell. That would be the way in which fiscal resources would be secured. The agreement is not to aim to sell shareholdings but to actually implement the sale.

REPORTER:Is it planned to incorporate such provisions in legislation?

CHIEF CABINET SECRETARY FUJIMURA:A decision on the specific wording of legislation will be made from now, but I believe that it will have to be expressed clearly that the extra 2 trillion yen will definitely be secured.

REPORTER:Unless clearly stipulated in legislation, the only clear figure that would be stated is the 11.2 trillion yen figure. Would you not say that it represents a rather insincere response from the Government to request understanding for tax increases, when no explanation is provided for the stipulated figure of 11.2 trillion yen, but the figure used for explanations is 9.2 trillion yen, for which there is no collateral?

CHIEF CABINET SECRETARY FUJIMURA:The figure stated is the figure calculated over the course of ten years and the shares in Japan Post have yet to be included. Once these various measures are incorporated, we will be able to secure extra fiscal resources of 2 trillion yen, and these will be used for fiscal resources for reconstruction, as contained in the agreement with the People's New Party.

REPORTER:With regard to the issue of restarting Hamaoka Nuclear Power Station, yesterday the mayor of Makinohara City stated that if operations at the power station were to be restarted, he would seek to hold a local referendum among residents. Would the results of such a referendum have an influence on the decision to restart operations at the power station?

CHIEF CABINET SECRETARY FUJIMURA:The understanding of local residents is very important. The implementation of a local referendum is one means of expressing local sentiment. The Government would naturally have to take into consideration such a result.

REPORTER:In that case, although Makinohara City is the actual location for the power station, if other municipalities in the vicinity were to implement local referenda, would the Government's position also be the same as the one you have indicated?

CHIEF CABINET SECRETARY FUJIMURA:Such a situation would entail discussions with the operating electric power company, on a case by case basis. The Government would make a final decision and the situation for each region would be different, as I have been asked on numerous occasions.

REPORTER:Returning to the issue of the 11.2 trillion yen in fiscal revenues, in the event that it becomes necessary to increase expenses for reconstruction, the Government has not made clear whether it would issue further reconstruction bonds, therefore even if additional resources were available to make up the 2 trillion yen that you have already mentioned, it does not necessarily follow that the tax increase would be reduced by 2 trillion yen. What are your thoughts on this point?

CHIEF CABINET SECRETARY FUJIMURA:I think that your question refers to future expenditure on reconstruction. Reconstruction expenses are not merely included in the third supplementary budget. There will naturally be further allocations in the full budget for the next fiscal year, which will increase. The starting point is the third supplementary budget and this has now been finalized, however additional future expenditure will be allocated in the budget for the next fiscal year.

REPORTER:That may be so, but there are figures of 19 trillion and 23 trillion yen for 5 and 10 years from now, and I believe that there is a possibility that as reconstruction measures are rolled out the fiscal resources that are required will also increase.

CHIEF CABINET SECRETARY FUJIMURA:Yes, there is that possibility.

REPORTER:If there is a possibility that the required fiscal resources will increase, even if non-tax revenues are increased from 5 trillion yen to 7 trillion yen, then there will still be a possibility that fiscal resources required through tax increases will exceed that figure. I think it means that it would not be possible for non-tax revenues to off-set the 11.2 trillion yen figure and keep it down to 9.2 trillion yen.

CHIEF CABINET SECRETARY FUJIMURA: Inthe law that I have just mentioned it is stipulated that the non-tax revenues and tax increases will be balanced out. If there are any further increases in budgetary requirements, these will be budgeted for in each fiscal year.

REPORTER:It is expected that an investigation into the accident at TEPCO's Fukushima Daiichi Nuclear Power Station will also be implemented by the Diet, which will have considerable powers and authority. However, this initial outlook is quite different in character from the Government's current Investigation and Verification Committee into the Nuclear Accident, which does not seek to find out whose fault it was . What are your views on this matter?

CHIEF CABINET SECRETARY FUJIMURA:I have heard that today, in the case of the House of Representatives, the Diet will be able to make a decision concerning this committee. The Government has left the investigation and verification to be implemented by a third party, which has been requested to objectively study the facts. The findings of the committee will be studied by a Diet committee, and while there will be further discussions the government committee will naturally cooperate with the Diet , as necessary.

REPORTER:If there are two committees investigating the accident as you have just explained, then there is a possibility that the results of investigations could differ, causing confusion. What is your view?

CHIEF CABINET SECRETARY FUJIMURA:I think that there is only one truth and it is that which we should concentrate on finding.

(Abridged)

REPORTER:Yesterday the administrative vice-minister of the Ministry of the Environment announced a policy concerning the establishment of storage facilities in eight prefectures for the management of contaminated sludge. Is it confirmed that such facilities will be established in all of these eight prefectures, and what is the schedule for this policy?

CHIEF CABINET SECRETARY FUJIMURA:The location for the intermediate storage facilities is still under consideration and I think that a conclusion has yet to be arrived at. The Act on Special Measures Concerning the Treatment of Radioactive Materials also stipulates that "The Government shall prepare the required facilities and take other measures as appropriate, with the cooperation of local public entities." I expect that the comments by the administrative vice-minister are based on the comments made by the Prime Minister when he visited Fukushima Prefecture, namely that he requested that materials originating in the prefecture be managed and stored within the prefecture. Whatever the case, I am aware that the Ministry of the Environment will continue to engage in considerations into this matter.