Press Conference by the Chief Cabinet Secretary (Excerpt)

Opening Statement by Chief Cabinet Secretary Suga

• The establishment of the Office for Drug Discovery Support Strategy at the National Institute of Biomedical Innovation

Today the Office for Drug Discovery Support Strategy, which will function as the headquarters for the Drug Discovery Support Network, was newly established at the National Institute of Biomedical Innovation. The Drug Discovery Support Network is an initiative that aims to ensure that the outcomes of outstanding basic research results in academia can be put into practical use as revolutionary new drugs through a process whereby the research bodies of all ministries work together as an integrated whole. This office has been established as part of a policy that seeks to advance items that need implementing promptly with regard to drug development and achieve results, prior to the anticipated establishment of a Japanese National Institute of Health (NIH) in the future. Following the establishment of the Office for Drug Discovery Support Strategy today, a commemorative symposium is scheduled to be held tomorrow at the Senri Life Science Center in Osaka Prefecture.

Q&As

• GDP
• The budget for FY2013
• The comfort women issue
• Japan-North Korea relations
• Tsuruga Nuclear Power Station

REPORTER: I have a question concerning gross domestic product (GDP). According to the preliminary figures released today, at an annualized rate in real terms the GDP for the January to March quarter rose 0.9 points over the previous period to stand at a high growth rate of 3.5 percent. There is a view that the figures for the April to June quarter will rise even further. What are your thoughts concerning the outlook for economic trends?

CHIEF CABINET SECRETARY SUGA: The GDP growth rate that has been recently announced stands at 3.5 percent, a result that has outstripped market expectations, which were for growth in the region of 2.8 percent. This is the second consecutive quarterly increase in the GDP growth rate. There are a number of factors behind this growth, one being that personal consumption has significantly increased, focusing on services such as dining and recreation and also on the automobile sector, given the gradual improvement and increasingly positive outlook for household finances. Another factor is that exports have increased for the first time in four quarters, against a backdrop of underlying strength in overseas economies. Furthermore, this result can be viewed as the first results of the economic policies of the Abe Cabinet, which have been mainly manifested so far in increases in personal consumption. Whatever the case, through the three prongs of policy for economic revitalization the Government aims to continue its efforts to overcome deflation and achieve economic growth that will bring with it increases in employment and income.

REPORTER: Next year consumption tax is scheduled to rise. I believe that one of the conditions for implementing the rise in the consumption tax is that the economic situation has turned around. If this is the case, the figures for the next quarter, April to June, will be considered as being particularly important. Could you tell us if you believe that environmental factors that are requisite for a tax increase are coming into alignment?

CHIEF CABINET SECRETARY SUGA: At the current point it is still important to be circumspect, and the Government's aim is to continue to work to ensure that economic policies are thoroughly implemented and put firmly on track. That is the thinking at the current time.

REPORTER: I have a question concerning the budget for FY2013, which was passed by the Diet yesterday. If you look closely at the budget you can see that it still includes unchanged allocations for items that the Liberal Democratic Party (LDP) had previously criticized the Democratic Party of Japan (DPJ) for during the DPJ administration and at the time of the election last year. These include the child benefit allowance, which is still in the budget, albeit under a different name, as well as funding to make high school education free and income subsidies for agricultural businesses. In light of the fact that the LDP was critical of such budget items, are we to understand that there was simply no time to amend such budgetary allocations for this fiscal year?

CHIEF CABINET SECRETARY SUGA: Rather than that it is the case that the Abe Cabinet has placed paramount priority on revitalizing the Japanese economy. It was for this purpose that the Government announced the three prongs of economic revitalization and has since wasted no time in implementing the first of these prongs - bold monetary policy - through the selection of a new governor and deputy governors of the Bank of Japan. We are thus proceeding with policy implementation in a manner that responds to expectations. The second of the three prongs is flexible fiscal policy, and following the previous passage of the supplementary budget for FY2012 and the passage of the FY2013 budget yesterday, I believe that we have formulated a budget that is well-balanced and is capable of ensuring that for the first time in three years tax revenues will exceed the issuance of government bonds. In particular, with regard to the revision of the salaries of civil servants in local governments, the reduction in the local allocation tax, the revision of social security, as well as the increase in the defense budget for the purpose of ensuring public safety and security, although there was very little time following the inauguration of the Abe Administration to engage in budget formulation over such matters, we were nonetheless able to compile a budget that takes into account all such items. As a result of such efforts the share price index has risen 60 percent since Prime Minister Abe was elected as LDP president, recently exceeding the 15,000 yen level. Therefore, I would venture to state that with the passage of the budget yesterday, the first and second prongs of economic revitalization are steadily being advanced. From now the third prong of economic revitalization, namely growth strategy, is something that we will focus on in order to ensure that the revitalization of the Japanese economy is robust and long-lasting.

(Abridged)

REPORTER: With regard to the military "comfort women" issue, co-leader of the Japan Restoration Party Toru Hashimoto has criticized the Government, noting that those who state that the issue has been legally resolved based on the Treaty on Basic Relations between Japan and the Republic of Korea are rather hurting the former "comfort women." What are your views on this remark?

CHIEF CABINET SECRETARY SUGA: Mr. Hashimoto is the leader of one of the opposition parties. The Government's view on this issue is clear and our basic stance is to endeavor to gain understanding concerning this view.

REPORTER: With regard to the visit to North Korea of Mr. Iijima, Special Advisor to the Cabinet, did Mr. Iijima carry with him a message of some kind or a letter from Prime Minister Abe to First Secretary Kim Jong-Un?

CHIEF CABINET SECRETARY SUGA: Given the nature of this matter, the official stance of the Government is to refrain from making any comment.

REPORTER: This is something that was also brought up in the press conference yesterday afternoon, but a meeting of the Nuclear Regulation Authority has concluded that the Unit 2 reactor of Tsuruga Nuclear Power Station is built over an active fault line, which has made it highly likely that the reactor will be decommissioned. What is the Government's view concerning this matter?

CHIEF CABINET SECRETARY SUGA: I am aware that in the expert meeting held yesterday it was concluded that the fracture zone directly beneath the Unit 2 reactor of Tsuruga Nuclear Power Station would appear to be an active fault line, based on current knowledge. In any case, it is the basic policy of the Cabinet to prioritize safety of nuclear power and we will continue to make every effort to ensure safety, based on scientific and technological grounds.

REPORTER: Will the recent conclusion of the expert meeting have any impact on the Government's plans to restart nuclear power stations?

CHIEF CABINET SECRETARY SUGA: The position of the Government on the restarting of nuclear power stations is clear. The safety standards will be finalized in July, after which a judgment will be made based on those standards.

(Abridged)