Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

(Abridged)

REPORTER: Turning to the subject of the United States (U.S.), the negotiations of the Joint Select Committee on Deficit Reduction (JSC) of the U.S. Congress have collapsed. Moving forward, the deficit is expected to be reduced compulsorily by a large margin. In this context, defense spending, too, will be cut by a scale of US$500 billion over 10 years. At this present moment, what is the Government's view regarding the impact on Japan-U.S. security arrangements, especially on the Futenma issue?

CHIEF CABINET SECRETARY FUJIMURA: First of all, this Congressional matter is about 2013 and beyond. In that sense, I believe this is not something immediate, for example, something that concerns next year. This is a matter regarding the year after next and beyond, and therefore, it is difficult for Japan to speculate the contents or the impact of the reductions in U.S. defense spending at this moment in time. President Obama stated in his speech to the Australian Parliament on November 17 that reductions in U.S. defense spending will not come at the expense of the Asia-Pacific region. Also, he indicated that the U.S. forces will maintain a strong presence in Japan and the Republic of Korea (ROK). Therefore, I anticipate that there will be no immediate impact, not so soon as in next year.

(Abridged)

REPORTER: I would like to ask a question regarding the comprehensive reform of taxation and social security systems. I believe that reforms are going to be promoted in accordance with the final draft proposal that was compiled in June. According to the contents of the proposal, I believe the Government will have to simultaneously deal with the (public's) increasing burden, which was not necessarily stated in the Manifesto. Regarding this matter, how does the Government intend to ask for the public's understanding?    

CHIEF CABINET SECRETARY FUJIMURA: In June, the Government and the ruling parties newly compiled a final draft proposal. The June proposal sets forth, for example, as it is now generally discussed, that consumption tax will be raised incrementally to 10% by mid-2010s. There is now widespread awareness about this. However, this proposal also sets forth that the taxation system as a whole will be reformed, including taxes other than consumption tax, as part of the comprehensive reform. The proposal presents a direction for considering each taxation item moving forward, and this vision is now being materialized by the Government's Tax Commission. Nothing has yet been decided. As these items are decided by the Tax Commission, I believe the Government will be making announcements and obtaining the understanding of the public.   

(Abridged)

REPORTER: My question concerns the Tax Commission, which you just mentioned. There were reports that the Tax Commission is considering increasing the income tax of high-income earners. What is your understanding of the facts? 

CHIEF CABINET SECRETARY FUJIMURA: In the context of the June proposal, with the aim of remedying disparities and improving the income distribution function and so forth, I believe a review is now taking place on personal income taxes as well from the perspective of reviewing the various income tax credits and reforming the tax rate structure. In that sense, I believe discussions are now taking place on what to do with the high-income group in the context of reforming the tax rate structure. No conclusions have been reached yet. It is that discussions are being conducted based on the direction of the June proposal.  

(Abridged)