Press Conference by the Chief Cabinet Secretary (Excerpt)

Opening Statement by the Chief Cabinet Secretary

• An overview of the Cabinet meeting
• The Ministerial Meeting on Remuneration-related Matters
• The first meeting of the Education Rebuilding Implementation Council
• The abduction of Japanese nationals in Algeria

CHIEF CABINET SECRETARY SUGA: I have a number of topics I would like to raise.

First I would like to give an overview of the extraordinary Cabinet Meeting. The meeting approved two general measures. With regard to statements by ministers, Minister Amari, Prime Minister Abe and the Minister of Finance made statements concerning the basic principles of budget formulation for FY2013, and the Minister of Internal Affairs and Communications and I made statements concerning the handling of the remuneration review for national public servants.

Next, we discussed the Prime Minister's Policy Speech. We are not yet at a stage at which we can disclose the details of the speech, therefore I cannot share the details with you today.

At the Ministerial Meeting on Remuneration-related Matters held today and at the Cabinet meeting that followed, a decision was made relating to the handling of the remuneration review for national public servants. Cabinet decisions made today are as per the document that has been distributed to you, but I will give you a rundown of the key decisions. With regard to the remuneration of national public servants, it has been decided that the recommendation regarding pay rise control for older employees (age 55 and older) made by the National Personnel Authority on August 8 last year is to be implemented beginning January 1, 2014. In order to swiftly and effectively address regional issues, we ask that local public bodies swiftly take necessary measures following the national Government's decision in relation to local civil servant remuneration in FY2013, in light of national public servant remuneration reductions.

My statements in relation to the details of today's Cabinet decisions have been distributed to you all. Today the first meeting of the Education Rebuilding Implementation Council was held. At the beginning of the meeting, Prime Minister Abe stated that the rebuilding of the education system is one of Japan's highest priority issues, on a level equal with economic revival, and the Government is determined to implement educational reforms. Eminent persons deliberated on the topic at the meeting. It is expected that the Council will intensively and swiftly discuss specific educational issues facing Japan while considering the recommendations and results made by the previous Education Rebuilding Council. For more details on this topic, please contact the department responsible.

Next I would like to speak on the Japanese nationals abducted in Algeria. Today, at 2:12 pm Japan time, or 6:12 am local time, a Government aircraft left Algiers with seven Japanese nationals and the bodies of nine other Japanese nationals. I have been informed that the Government aircraft is scheduled to land in Haneda Airport at around 7:00 am on Friday, January 25. Minister for Foreign Affairs Kishida, Deputy Chief Cabinet Secretary Kato and Deputy Chief Cabinet Secretary Seko are expected to meet the aircraft at the airport. After arriving in Japan, Parliamentary Senior Vice-Minister for Foreign Affairs Suzuki is scheduled to visit the Prime Minister's Office together with Minister for Foreign Affairs Kishida to provide Prime Minister Abe with a status update on the situation in Algeria. Following this, we are planning to hold the seventh meeting of the Response Headquarters for the Abduction of Japanese Nationals  in Algeria with Parliamentary Senior Vice-Minister for Foreign Affairs Suzuki in attendance. With regard to the additional person that remains unaccounted for, Parliamentary Secretary for Foreign Affairs Kiuchi will continue with his efforts to confirm the safety of this individual.

That is all from me.

Q&As

• The basic principles of budget formulation for FY2013
• The Tax Reform Outline

REPORTER: You stated that the Prime Minister made some comments when the basic principles of budget formulation were decided at the extraordinary Cabinet Meeting. If possible, could you share with us the comments made by the Prime Minister?

CHIEF CABINET SECRETARY SUGA: The basic principles of budget formulation for FY2013 will implement the three prongs of monetary policy, flexible fiscal policy and growth strategy in a unified manner and expediently implement initiatives designed to revive the Japanese economy. With this understanding, the basic principles will aim to boldly prioritize reconstruction and disaster prevention, the creation of wealth through growth, and securing the safety of people's livelihoods and regional revitalization. The Prime Minister also stated that budget formulation will be completed taking into consideration the goals of putting public finances on a sound footing, reducing the issuance of government bonds as much as possible, and building a fiscal structure that is sustainable in the medium- to long-term. This was what the Prime Minister said. Following these comments, the Prime Minister also encouraged all Ministers to work on budget formulation while bearing these principles in mind.

REPORTER: I believe that the meeting approved the Tax Reform Outline. Prime Minister Abe has set the goal of reviving the economy under the name of "Abenomics" and I believe that the taxation system will become a very important part of this. I believe that the Tax Commission was principally led by the party and no Tax Commission meetings were held by the Government. Given this, could you tell us how the Government was intending to reflect its opinion?

CHIEF CABINET SECRETARY SUGA: Firstly, the Cabinet was inaugurated on December 26. Amid this extremely difficult economic situation we formulated a supplementary budget and the most recent budget proposal, and will also formulate a 15-month budget. We have worked on this with utmost effort. In light of this, I admit the Tax Commission meetings were predominantly held by the party rather than the Government due to time constraints. However, I understand that taxation reforms designed to reverse appreciation of the yen and deflation, and trigger economic revival, which Prime Minister Abe has set as goals, have been under development with close collaboration  from the Ministry of Finance and Ministry of Internal Affairs and Communications. There has always been cooperation with these ministries.

REPORTER: Of these taxation reforms, which part most directly reflects the Prime Minister's determination to reverse appreciation of the yen and deflation?

CHIEF CABINET SECRETARY SUGA: I believe that there were a number of budget and taxation reforms that will stimulate the economy. I understand that there were a number of measures that were designed to improve the current economic environment such as tax exemptions for grandparents giving cash presents to their grandchildren or allowing social expenses to be claimed as specified expenses.

REPORTER: I believe that during today's meeting of the General Council of the party, some conflicting opinions were presented. I understand the reason for the clash of opinions to be the reinstatement of earmarked funds for road spending with approval given but opinions remaining divided. Looking at the statement, we can see that the statement includes a phrase that says something to the effect of part of the earmarked funds will be used for roads. Could you tell us what exactly the Government said?

CHIEF CABINET SECRETARY SUGA: Compared to discussions during the party's previous Tax Commission meetings I believe that these discussions were not out of the ordinary. Taxation is one of the building blocks of politics, so it is expected that Diet members, who know the situations of their own electorates thanks to the election, would have these heated debates. In this sense I believe that the party's Tax Commission has formed some kind of understanding. However, I would like to make one thing clear. Some newspapers reported today that the automobile weight tax will return to being earmarked funds for road spending. However, this will never be the case. I would like to clearly and publicly say that this tax will remain a part of general revenue. Looking back, during the first Abe Cabinet the Cabinet decided to incorporate earmarked funds into general revenue, something that had proved difficult. Therefore, I would like to clearly say that there is absolutely no possibility that this decision will be reversed during the second Abe Cabinet.

(Abridged)