Press Conference by the Chief Cabinet Secretary (Excerpt)

Opening Statement by Chief Cabinet Secretary Suga

• An overview of the extraordinary Cabinet meeting
• The FY2013 budget
• A meeting of the Security Council
• The Verification Committee on the Terrorist Incident against Japanese Nationals in Algeria

CHIEF CABINET SECRETARY SUGA: I would first like to give an overview of the extraordinary Cabinet meeting. The meeting approved three general measures. With regard to statements by ministers, the Minister of Finance made a statement concerning the approximations, etc., of the FY2013 draft budget. The Minister for Internal Affairs and Communications made a statement concerning the results, etc., of the FY2013 government structures and quota screening and concerning the outline of the FY2013 tax reform (local tax).

The Minister of Finance explained that the FY2013 budget was formulated based on the concept of the "15-month budget" along with the FY2012 supplementary budget. In order to prevent the worsening of the fiscal situation, the content of the budget was reviewed and prioritized. The budget was formulated with the idea of limiting the amount of government bond issues as much as possible, and as a result, it has been possible for a tight budget to be achieved. For details, I ask that you please direct your questions to the relevant ministries, including the Ministry of Finance.

Prior to the Cabinet meeting, the Security Council convened a meeting. The meeting deliberated the "Main Items for FY2013 Defense Build-up" included in the defense budget, which was formulated in accordance with the FY2013 Compliance Guidelines for the Formulation of the Defense Budget that was decided at the Security Council and Cabinet meetings last week. The main items were decided as shown in the material which has been distributed to you. Regarding the specific content of the individual equipment, I ask that you please direct your questions to the Ministry of Defense.

I have a report regarding the terrorist incident involving Japanese nationals in Algeria. From around 1:40 pm today, the first meeting of the Verification Committee on the Terrorist Incident against Japanese Nationals in Algeria was held. At the meeting, Prime Minister Abe instructed at the outset that in order to not let the noble sacrifices from this incident be in vain, the Government must work together under the leadership of the Chief Cabinet Secretary in order to promptly draw on the lessons learned from this incident, so that Japanese nationals and companies can conduct activities overseas without worry. I too believe that it is of critical importance to ensure the safety of Japanese nationals, etc., who are living abroad for maintaining and advancing Japan's overseas economic activities and international contributions. The Committee will first fully verify the Government's response to this incident and aim to compile the verification findings by the end of February. An advisory panel will then be set up. After discussions have taken place at the panel based on the Government's verification findings, a conclusion of some kind will be reached regarding what the Government should do. In any case, we will be handling this in a timely manner.

Q&As

• The Verification Committee on the Terrorist Incident against Japanese Nationals in Algeria
• The TPP
• The FY 2013 budget
• The Prime Minister's visit to the U.S.

REPORTER: Concerning the Algerian incident Verification Committee, you said that the verification findings will be compiled by the end of February. Will the advisory panel that will follow also have a timeframe of around one month? Will it be a little longer?

CHIEF CABINET SECRETARY SUGA: I believe it may take a little more time.

REPORTER: Roughly how many months?

CHIEF CABINET SECRETARY SUGA: The intent is nonetheless to compile a direction without taking too much time.

REPORTER: With regard to this matter, can you tell us by when the next meeting will be held and what the agenda of the next meeting will be?

CHIEF CABINET SECRETARY SUGA: Today's meeting was attended by director-general-level members from the relevant ministries. Verifications will therefore first be done at the respective ministries and agencies, and they will all gather together and provide reports based on the verifications. This is the format we will be following. I believe it will depend on how things proceed at the ministries and agencies, but I believe it will not take too long.

REPORTER: Today, I believe directors-general from the relevant ministries and agencies - the Ministry of Foreign Affairs, the Ministry of Defense, the National Police Agency, and the Ministry of Economy, Trade and Industry - attended. Can you explain, to the extent that you can, what sorts of reports were made by the respective ministries and agencies?

CHIEF CABINET SECRETARY SUGA: In the future, we hope to add the Ministry of Justice to that list. The respective ministries and agencies have already begun conducting verifications since the incident occurred. Therefore, they were preliminary stage reports.

REPORTER: Regarding the advisory panel that will follow the completion of the verifications of each ministry and agency, you mentioned "what the Government should do." Can you share some examples of what you currently have in mind?

CHIEF CABINET SECRETARY SUGA: In the process of conducting the verifications of this incident, we are coming to understand that there are things which should be done on the part of companies and things which should be done on the part of the Government. The Government ministries and agencies must work together, and indeed, the Government and private companies must also work together. Through my involvement in the response to this incident, I feel very strongly that these players need to work together consistently. That is one thing. The other thing is that experts will be making concrete proposals on what is necessary based on their viewpoints as experts, and these too will be compiled.

REPORTER: Related to this question, as to "what the Government should do," I believe there are mainly two items which have been raised within the Liberal Democratic Party (LDP) - the revision of the Self-Defense Forces Act and the review of the current assignments of defense attach?s. Is there any possibility that these items will be reviewed as part of "what the Government should do?"

CHIEF CABINET SECRETARY SUGA: Naturally, as we are starting everything from scratch, I believe they will be covered in the review.

REPORTER: I may have confirmed this with you once before, but is it correct to think that the Verification Committee - which I understand will complete the verifications in around one month - will at that stage compile some kind of a report or something similar regarding the responses?

CHIEF CABINET SECRETARY SUGA: As we are starting from scratch, the Verification Committee will naturally be compiling a report on what went well and in a sense what went wrong.

REPORTER: Since this incident, you have noted on the need for the National Security Council (NSC). Will the verifications of the Verification Committee be linked to the launch of NSC? Or will the Government be considering this separately? Which is it?

CHIEF CABINET SECRETARY SUGA: It was decided from before that an advisory panel would be established regarding NSC. And with this incident taking place, I feel deeply that as the ministries and agencies are compartmentalized, it would be better if they are consolidated into one and NSC was responsible for the response of the Japanese Government to this incident. I believe the verifications will be reflected in such discussions.

REPORTER: Sorry to change the subject, but I would like to ask a question regarding the Trans-Pacific Partnership (TPP). The World Economic Forum Annual Meeting (Davos meeting) was held recently, and on that occasion, Minister of Economy, Trade and Industry Motegi and United States Trade Representative (USTR) Kirk held a meeting. In today's press conference, Minister Motegi stated that he believes he was able to obtain the understanding of the United States (U.S.) regarding the provisions on items which will be exempted from the TPP. Meanwhile, Minister of Agriculture, Forestry and Fisheries Hayashi has stated in his press conference following the same Cabinet meeting that he believes understanding has not been obtained. What are the Government's views regarding the extent of the U.S.'s understanding concerning exemption provisions?

CHIEF CABINET SECRETARY SUGA: With regard to this, I intend to lead efforts to make sure that contrary views between relevant ministers and the Government do not emerge. In particular, Minister Motegi has just returned, and I believe this was probably the feeling that he got when he went to Davos. These views were not yet shared within the Government.

(Abridged)

REPORTER: I have a question regarding the budget for the next fiscal year which was discussed at the extraordinary Cabinet meeting. Although this question is repetitive, I would like to ask which areas of the budget you believe Prime Minister Abe's political style was best demonstrated? This can be a specific policy or the budget drafting process - it does not matter. I would appreciate it if you can identify a few items which you believe reflect the Prime Minister's political style.

CHIEF CABINET SECRETARY SUGA: First of all, in principle, the basis is that the supplementary budget and the new budget - the 15-month budget - is the budget to revitalize the Japanese economy. In this context, as is the case with the supplementary budget, I believe the budget was established with priority being given to the three areas of reconstruction and disaster prevention, the creation of wealth creation through growth, and securing safety of people's livelihood and regional revitalization. In addition, from the standpoint of fiscal discipline, we were able to have a good balance of measures, such as the 7.8% reduction of the remuneration of local public servants or making the costs of the public assistance system more reasonable. As a result, we have broken away from the abnormal situation of the past three years in which tax revenues were below the amount from government bonds, and I believe the budget is a tightened budget - a budget that the Prime Minister was aiming to achieve.

REPORTER: If I may ask one more related question. In preparing the draft budget, while there is praise from within the party for it, some dissatisfaction or criticism has also emerged in the sense that the budget formulation was led by the Government and there was little party involvement. What are your thoughts regarding the fact that there is such criticism?

CHIEF CABINET SECRETARY SUGA: As everyone is aware, the Cabinet was launched on December 26 of last year. The Government did not even have a day to lose. The Prime Minister has announced that he is determined to get off to a fast and powerful start. Following the investiture ceremony on that day, I believe the press conferences by the respective ministers and visits to the offices ran into 2:00 am or 3:00 am of the next day. We were determined to revitalize the economy with that kind of speed. The budget was formulated with this level of determination amid the difficult economic situation. There was also the tax system. As we were the opposition party, we were totally excluded from the budget formulation and taxation system reform. And then we went from an opposition party to a ruling party. And it was the end of the year. In light of these factors, we may not have been able to have sufficient exchange of opinions with everyone in the party. However, I believe the party understands this. Nevertheless, the Government have coordinated with the party at each juncture. It was not like the LDP of the past when there was time to formulate the budget. I believe the party - the people of the party - understand this.

(Abridged)

REPORTER: Changing the subject, I would like to ask a question regarding the itinerary of the Prime Minister's visit to the U.S. I understand that in today's press conference, Chairman Waki of the LDP Diet Affairs Committee in the House of Councillors stated that arrangements are being made for the U.S. visit to take place in the latter half of the week beginning February 18. You have said that it will be arranged bearing in mind the Diet schedule and so on. Can you once again explain what the current status of the arrangements being made regarding the dates of the U.S. visit is?

CHIEF CABINET SECRETARY SUGA: As there is the schedule of the Diet session, etc., to consider, the visit is being arranged for the week of the 18th as you just mentioned.

REPORTER: Is my understanding correct that it will be towards the end of the week?

CHIEF CABINET SECRETARY SUGA: As there is the schedule of the Diet committees, etc, and the schedule of the budget and so on, we are making arrangements bearing those in mind.