Press Conference by the Chief Cabinet Secretary (Excerpt)

Opening Statement by Chief Cabinet Secretary Suga

CHIEF CABINET SECRETARY SUGA: I would like to give an overview of the Cabinet meeting. The meeting approved three general and other measures, the promulgation of legislation, and personnel decisions. With regard to statements by ministers, the Minister of Economy, Trade and Industry, the Minister for Foreign Affairs, the Minister of Defense, and Prime Minister Abe made statements concerning the “Three Principles on　Transfer of Defense Equipment.” Prime Minister Abe, Minister Amari, the Minister of Finance, and the Minister for Internal Affairs and Communications made statements concerning the smooth implementation of the increases in the consumption tax rate and local consumption tax rate. The Minister of Health, Labour and Welfare made a statement concerning the enhancement and stabilization of social security through the consumption tax increase. With regard to the statements by the Prime Minister, these are as shown in the materials in front of you. I too would like to personally ask once again for the understanding and cooperation of the people for the comprehensive reform of social security and taxation systems, including the consumption tax increase.

In ministerial discussions following the Cabinet meeting, the Minister for Internal Affairs and Communications made a statement concerning a decision on the FY2014 Administrative Evaluation Program. The Minister of Finance made a statement concerning the Budget Execution Survey.

Next, I have an announcement regarding personnel decisions in relation to the post of Special Advisor to the Cabinet. It was decided that Mr. Isao Kiso, former Ambassador of Japan to UNESCO, and Mr. Tomohiko Taniguchi, Professor at the Graduate School of System Design and Management of Keio University, would be appointed as Special Advisors to the Cabinet effective today. I would like to inform you that a short while ago the Prime Minister gave them each letters of assignment. Mr. Kiso possesses brilliant and global insight in the area of cultural property and other fields, having served in such capacities as Director-General of the Cultural Properties Department of the Agency for Cultural Affairs, the Director-General for International Affairs of the Ministry of Education, Culture, Sports, Science and Technology, and Ambassador to UNESCO. He will therefore offer information to and advise the Prime Minister on “UNESCO’s cultural measures.” Mr. Taniguchi possesses brilliant insight in the area of international public relations, having served in such capacities as Deputy Press Secretary of the Ministry of Foreign Affairs and Councillor of the Cabinet Secretariat of the Cabinet Public Relations Office, and will therefore offer information to and advise the Prime Minister on “international public relations.”

Prior to today’s Cabinet meeting, the Government held a meeting of the National Security Council, and deliberated the “Three Principles on Transfer of Defense Equipment.” We approved the Principles in the Cabinet meeting. In addition, we decided on the “Guidelines for Overseas Transfer of Defense Equipment etc.” during the meeting of the National Security Council. In order to make a “Proactive Contribution to Peace” based on the principle of international cooperation, we set out new principles that increase the clarity and transparency of the procedures pertaining to the transfer of defense equipment and their checking mechanisms to a greater extent than ever before. Under these principles, Japan will engage more proactively in contributing to peace and in international cooperation through the use of defense equipment and other means. Simultaneously, Japan will take part in the joint development and production of defense equipment, and so forth. For more information, I ask that you please inquire with the National Security Secretariat and the relevant ministries and agencies.       

Q&As

• The issue regarding the consumption tax
• The issue concerning the Japan-North Korea director-general level consultation
• The issue of the Hague Convention
• The issue regarding “Three Principles on Transfer of Defense Equipment”

REPORTER: I have a question regarding the consumption tax. With the 8% consumption tax being introduced from today, there is talk about a recoil reduction in demand. In light of this, what is the Government’s outlook regarding the expected economic slowdown? Can you please once again explain the measures for preventing a potential slowdown?

CHIEF CABINET SECRETARY SUGA: First of all, starting from today, the consumption tax will be 8%. The increase is aimed at covering the growing social security expenses, which are rising every year, thereby improving our national finances. In other words, it is part of a comprehensive reform. Every year, 2.9 trillion yen in tax revenue will be used to raise the portion of the basic pension funded by the national treasury from a third to half. The increased tax revenues will also be used to enhance support for children and childcare, and for other measures. This is something for which we would like to gain the full understanding of the people. Furthermore, as we seek to exit deflation, we are making efforts to prevent any possible relapse in the Japanese economy that may take place as a result of a recoil reduction in demand following the consumption tax increase, and are striving to minimize any adverse economic impact. Our efforts include formulating an economic package in October last year, and passing the supplementary budget on February 6 and the FY2014 budget on March 20 with the cooperation of both Houses. The Government will also execute both budgets ahead of schedule. In addition to these measures, the Government will also carefully explain to the people the significance of the consumption tax increase, its necessity, and the measures to cope with it. At the same time, we will closely monitor the economic trends.

REPORTER: Today, the Bank of Japan’s Tankan survey (Short-term Economic Survey of Enterprises in Japan) was also announced. According to the survey, the business confidence of large enterprises in the manufacturing industry improved for the recent consecutive quarter. So far, Abenomics has had a positive impact on the Japanese economy. Can you once again explain the economic impact of the consumption tax?

CHIEF CABINET SECRETARY SUGA: First of all, to date, the Abe administration has implemented economic policies and other measures with the intention of revitalizing the Japanese economy by achieving the two things which are truly critical for Japan – exiting from deflation; and fiscal rehabilitation. Prime Minister Abe launched the three arrows of Abenomics in order to realize this economic revitalization. As a result, in the one year and three months since the inauguration of the administration, stock prices recovered from the upper 8,000 yen level to around the 15,000 yen level, and real GDP increased for the fourth consecutive quarter. Furthermore, the national ratio of jobs to applicants is at a high level for the first time in six years and six months, having risen to 1.05. In addition, with regard to the business confidence of small and medium-sized enterprises, in December of last year, business confidence became positive for the first time in 6 years for the manufacturing industry and for the first time in 21 years and 10 months in fact for the non-manufacturing industry. Even looking at the status of the responses to the spring wage offensive that shifted into full swing recently, the wages are at the highest level for the past ten years. As such, I perceive that the pickup in the economy is steadily spreading to the wider economy. The Japanese economy is beginning to regain confidence following many years of sustained economic stagnation. In this context, to avoid a relapse back to deflation as a result of the consumption tax increase, the Government is taking measures as I mentioned moments ago. In October of last year, when the consumption tax increase was decided, the Government simultaneously unveiled an economic stimulus package, including tax reduction measures of around 1 trillion yen and economic measures of over 5 trillion yen. In December of last year, the Government also set out the Economic Measures for Realization of Virtuous Cycles. Furthermore, in accordance with these measures, we established the supplementary and main budgets. In any case, the Government has taken the optimal measures to avoid a relapse. Given that the consumption tax rate has been increased from today, the Government will continue to steadily take measures while closely monitoring the situation.  
 
(Abridged) 

REPORTER: Today the consumption tax rate was raised to 8% and at the end of this year, the Government will be deciding whether or not to increase the consumption tax further, to 10%. Perhaps I am getting slightly ahead of myself, but at this moment in time, what are your thoughts regarding this?

CHIEF CABINET SECRETARY SUGA: First, the consumption tax rate was raised today, and as I just explained, the Government is taking thorough countermeasures to minimize any adverse impact. As part of this, we will execute the budgets ahead of schedule, for example. Then I believe we will make a decision based on the resulting April-June quick estimation, and ultimately, the July-September economic indicators. 

(Abridged)

REPORTER: My question concerns the Japan-North Korea director-general level consultations held on the 30th and 31st of last month. The two-day long consultations ended yesterday. Do you have any comments regarding this? In particular, do you have any comments regarding the agreement reached between Japan and North Korea to continue the intergovernmental consultations with the abduction issue being one of the items on the agenda? Also do you have any thoughts regarding the fact that North Korea demanded that Japan come to terms with the past and Japanese colonial rule?  

CHIEF CABINET SECRETARY SUGA: First of all, I was informed that Japan and North Korea held candid and sincere consultations regarding the wide range of outstanding issues of concern for both countries and agreed to continue the consultations. In particular, I understand that Japan lodged a strong protest to North Korea over its nuclear and missile programs, and stated clearly that the international community will not tolerate them. Furthermore, the abduction issue is also a critical issue for Japan on humanitarian grounds. Japan and North Korea agreed to continue to hold further negotiations based on frank exchanges of views regarding each of these issues. In fact, today, I will be briefed on the consultations after the Japanese delegation returns to Japan.    

REPORTER: The Convention on the Civil Aspects of International Child Abduction (the Hague Convention) entered into effect today. If the Government intends to support the operations of the Hague Convention, could you please tell us how you will do so?

CHIEF CABINET SECRETARY SUGA: The Hague Convention was one of three key items on the agenda when the Prime Minister and President Obama held a summit meeting in February of last year, together with the Trans-Pacific Partnership, and the relocation of Futenma Air Station and the land reclamation in Henoko. In this context, it has been passed at the Diet, and the Hague Convention entered into effect today. The Government will watch over the process to ensure that the operations of the Hague Convention are carried out appropriately.  

(Abridged)

REPORTER: Returning to the subject of the “Three Principles on Transfer of Defense Equipment,” did the Prime Minister say anything about the objectives or make any comments today during the National Security Council meeting, the Cabinet meeting, or the ministerial discussions following the Cabinet meeting?  

CHIEF CABINET SECRETARY SUGA: In his remarks regarding the “Three Principles on Transfer of Defense Equipment,” the Prime Minister was saying that in order to obtain the understanding of the people, we will steadily explain to the public that the new principles will increase clarity and transparency. He also explained that we will very much respect all existing efforts that have been made to date. 

REPORTER: I would like to ask a question regarding the personnel decisions for the post of Special Advisor to the Cabinet, in particular, with regard to Mr. Taniguchi. I understand that, as Councillor of the Cabinet Secretariat, Mr. Taniguchi was supporting the Prime Minister in various capacities, including helping with his speeches. What difference do you think changing Mr. Taniguchi’s post to Special Advisor to the Cabinet will make? 

CHIEF CABINET SECRETARY SUGA: First of all, Mr. Taniguchi will take up the position of Professor at the Graduate School of System Design and Management of Keio University from April. Nevertheless, the Prime Minister continues to need information and advice from Mr. Taniguchi, who has built up extensive expertise over the years in the field of international public relations. Therefore, while it is a part-time position, we have asked Mr. Taniguchi to assume the role of Special Advisor to the Cabinet. We hope that during the time he has available, Mr. Taniguchi will be able to leverage his insight and experience in the area of international public relations to support the Prime Minister as best he can.