Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

• The result of Short-Term Economic Survey of Enterprises in Japan (Tankan)
• The environmental issue
• The tax reduction in relation with the economic policy
• The inspections for aging pedestrian bridges
• The Fukusima Daini Nuclear Power Station
• The remarks of former Prime Minister Koizumi regarding denuclearization

REPORTER: According to the Short-Term Economic Survey of Enterprises in Japan (Tankan) released by the Bank of Japan, large manufacturers were assessed to have recovered and returned to the same levels as 5 years and 10 months ago. This was the highest level achieved since the financial crisis. Could you offer your take on this?

CHIEF CABINET SECRETARY SUGA: This assessment of the business conditions for large manufacturers showed an increase of 12 points, which exceeded the market forecast of 8 points. Compared to the previous survey conducted in June, there was an improvement of 8 points. This improvement was backed by factors such as the recovery of production and exports, and strong domestic demand. This is the first time we had achieved such a level in approximately five and a half years, since the survey was conducted in December 2007 prior to the financial crisis. Looking ahead, the future outlook is expected to improve marginally for mainly small and medium-sized manufacturing enterprises.

Planned ordinary income for fiscal 2013 is expected to increase year-on-year, and compared to the previous survey, is revised upwards mainly in the manufacturing industry. Planned capital investment for fiscal 2013 is also expected to increase year-on-year, and is also revised upwards as compared to the previous survey.

In short, looking at these overall trends, I believe we can confirm the continued positive development of business conditions, income, and capital investment plans for enterprises.

REPORTER: The assessment of business conditions for enterprises showed improvements that exceeded forecasts of most people. You have continued to assert that the Prime Minister will make the final decision on increasing consumption taxes while also taking into account the Tankan and other figures. Could you comment on this again?

CHIEF CABINET SECRETARY SUGA: Abenomics, which is the economic policy propounded by Prime Minister Abe, has begun to produce results in the abovementioned aspects, as we have observed through the improvements in economic indicators. In that sense, since these figures released by the Bank of Japan in the Tankan, the final indicator the reference showed improvements in performance, I believe we will remain confident in Abenomics, the Prime Minister's economic policy, and continue to promote this policy.

REPORTER: I have a related question. In that case, could we say that Prime Minister Abe has decided to raise the consumption tax?

CHIEF CABINET SECRETARY SUGA: I believe the Prime Minister will make the decision today after completing the respective procedures.

REPORTER: I believe the Prime Minister will set forth an economic policy in addition to making the decision on the consumption tax this evening. There has also been talk about other issues such as corporate tax. However, I think the main concern for the people of Japan is how these policies will impact their daily lives. What are your thoughts on this?

CHIEF CABINET SECRETARY SUGA: The Japanese economy has suffered from prolonged deflation over a period of about 15 years. The Abe administration was born under such circumstances. Over the past nine months, the three arrows of Abenomics were quickly formulated and implemented steadily, one at a time. As a result, I believe we have finally arrived at the opportune moment to break away deflation. Grabbing this opportunity, we aim to do all we can to establish an economy that offers bright future prospects for all our citizens. This economy will offer an environment that enables private sector to stimulate investments through their own efforts, allow the economy to recover cyclically, and thereby contribute to higher wages.

REPORTER: Earlier, I believe Ministers Motegi, Ishihara, and Kishida joined you in a discussion about environmental issue. According to some reports released today, the Government is considering revising the greenhouse gas emissions reduction target for 2020 from 6% to 7%. Could you tell us what has been discussed?

CHIEF CABINET SECRETARY SUGA: First, there is no factual truth to these reports. While it is true that the four Ministers held a talk today, they covered various topics such as environmental and energy policies, and recent trends. During the talk, they did not come to any particular decision about global warming countermeasures.

REPORTER: I have a question related to economic measures. The package is said to be on a scale of 5 trillion yen, with approximately 2 trillion yen to be directed to tax reduction. I would first like to ask for your comments on this allocation.

CHIEF CABINET SECRETARY SUGA: This has not yet been officially decided. I believe that a final decision will be made today after various procedures have been completed.

REPORTER: While an official decision has not been made, if this were the decision made, a tax reduction of 2 trillion yen would be based on the presumption that capital investments would be reduced and ending the special corporate tax for reconstruction. On the other hand, what we call personal taxes, such as income taxes and the parts of personal taxes that are actually borne by the individual, are not included in this tax reduction. This seems to be somewhat biased in favor of corporations and enterprises. What are your thoughts on this?

CHIEF CABINET SECRETARY SUGA: While I am not at liberty to comment on something that has not been decided on, I will just say that breaking away from deflation is the first and most important deciding factor for the Prime Minister in considering this consumption tax hike. In reality, there is also the consideration that there can be no reconstruction without an economic recovery. At the same time, he also has to think about what is important in order to exit deflation and achieve fiscal rehabilitation. I believe the Prime Minister will make his decision while considering the issue from various perspectives such as these.

REPORTER: I would like to raise a question about the lack of inspections carried out for aging pedestrian bridges. This problem arose as a result of the lack of manpower and budget among local governments, which caused the inspections to be postponed. These circumstances appear to be a part of the reasons behind the problem. From the perspective of safety, what are your thoughts on this issue?

CHIEF CABINET SECRETARY SUGA: As you have just mentioned, the Board of Audit of Japan conducted an investigation into the situation concerning pedestrian bridges, including inspections and quake-resistance. They then requested that the expressway companies take steps to improve the situation. As for ensuring the safety of these bridges, I think that this is a matter of great importance. Especially, the inspection of pedestrian bridges, which you have pointed out, as well as quake-resistance, are important issues that could pose serious problems to safe passage for users. I believe the Ministry of Land, Infrastructure, Transport and Tourism will take thorough steps to ensure that the managers of pedestrian bridges, such as local governments or expressway companies, work together to manage and maintain these facilities in an appropriate manner.

(Abridged)

REPORTER: Excuse me. I have a question about a separate issue that I also asked about yesterday. Minister for Economy, Trade and Industry Motegi stated that the handling of Fukushima Daini Nuclear Power Station would be left to the decision of the power station operator. At the same time, he said that it could not be handled on the same footing as other nuclear power stations and hinted at the possibility of decommissioning the power station. What is the Government's stance on the future of Fukushima Daini Nuclear Power Station?

CHIEF CABINET SECRETARY SUGA: In any case, I believe that the operator will make the decision about Fukushima Daini Nuclear Power Station based on an overall assessment of the larger picture of future energy policies, application to new regulations and standards, as well as opinions and feedback from local residents. In his response yesterday, Minister Motegi also stated firmly that the decision should be made by the operator.

(Abridged)

REPORTER: Recently, former Prime Minister Koizumi has called for denuclearization and the elimination of nuclear power on several occasions, such as at lectures and dinners. These seem to be strong words coming from a former Prime Minister from the Liberal Democratic Party. What are your thoughts on this?

CHIEF CABINET SECRETARY SUGA: It is a fact that there are varying opinions about the energy issue, and in particular, the nuclear power issue. In any case, the Government positions the formulation of a responsible energy policy as a matter of great importance. This includes the basic perspectives of ensuring a stable supply of energy, and reducing energy costs. To date, Prime Minister Abe has also spoken about this at various meetings, expressing that he aims to reduce dependency on nuclear power to the extent possible.

(Abridged)