Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

• The election in the House of Representatives
• The postponement of increasing consumption tax

REPORTER: During this morning’s meeting between the secretaries-general and Diet affairs committee chairmen of the Liberal Democratic Party (LDP) and Komeito party, they affirmed their goal to secure at least a “stable majority” of seats in the House of Representatives election. Is it correct to understand that they readjusted the threshold between victory and defeat from “a majority of seats,” which is what the Prime Minister stated at his press conference yesterday?

CHIEF CABINET SECRETARY SUGA: I have not been briefed about this, as this is a matter between the two political parties. However, my understanding is that the Prime Minister’s statement says it all. The position of the Government is entirely consistent with the statements made by the Prime Minister.

REPORTER: I have a related question. The Prime Minister stated that he would step down if the LDP and Komeito fail to win a majority of seats. Some members of the ruling parties have expressed the opinion that a majority of seats sets the bar rather low. What is your view, Chief Cabinet Secretary?

CHIEF CABINET SECRETARY SUGA: In any event, we are the ones calling for an election, and the ruling parties are presently engaged in executing policies. In this sense, I think a majority of seats is logical bar to set.

REPORTER: I have a related question. A majority of seats would mean that the ruling coalition loses, at most, about 80 of the seats it currently possesses. Even then, you would judge that Abenomics has obtained the understanding of the people?

CHIEF CABINET SECRETARY SUGA: It would like to refrain from answering hypothetical questions.

REPORTER: Say the ruling coalition obtains a majority of seats. If the number of seats is divided between the LDP and Komeito, it is possible that, depending on the circumstances, they will slip behind opposition parties in terms of the number of seats. In this regard, some people say that the line separating victory from defeat is not very realistic. What is your opinion?

CHIEF CABINET SECRETARY SUGA: The Government considers it logical that the coalition at least maintains a majority to effectively execute policies.

REPORTER: The Prime Minister has decided to postpone the additional consumption tax increase by a year and a half. At yesterday’s press conference, the Prime Minister explained that this was in order to ensure that Abenomics succeeds. What simulations did the Government conduct to reach this conclusion of the one-and-a-half year postponement? Can you explain the basis for the one-and-a-half year postponement?

CHIEF CABINET SECRETARY SUGA: First of all, as I stated yesterday, through launching Abenomics after we took over the reins of government, the yen’s excessive appreciation was corrected, and stock prices nearly doubled when compared to the previous figures. During the DPJ-led government, negative growth was recorded for three consecutive quarters. Under such circumstances, the consumption tax could not be increased. This is matter of course. The consumption tax was increased to 8% after Abenomics created economic conditions that made this feasible. As for the negative growth recorded for the July-September quarter, I believe the recoil following the consumption tax increase to 8%, bad weather conditions this summer, and other factors played a part in this. Nevertheless, the overall economy is on a moderate recovery path, and the Japanese economy is revitalizing at a steady pace thanks to Abenomics. The average monthly wages for employees increased for the first time in about 17 years. My understanding is that this trend will hold steady. In this sense, Abenomics has played an effective role even under the given circumstances. Based on the situation, the Prime Minister deemed that postponing the timing of the additional 2% increase by over a year, thereby avoiding successive consumption tax increases in a short period of time, were appropriate steps in achieving a sound economy. Furthermore, the Prime Minister determined that this length of time was necessary to ensure that increases in corporate earnings translate into wage increases as well as further improvements in employment conditions, and thereby, to the realization of a positive cycle of the economy.

REPORTER: The opposition parties are increasingly adopting a confrontational approach, saying that the dissolution of the House of Representatives was without cause and was conducted to conceal the failure of Abenomics. What main points will the ruling parties be preaching during the election campaign?  

CHIEF CABINET SECRETARY SUGA: As the Prime Minister stated yesterday during his press conference, the tax system is a critically important issue in politics. It is essential that we first have the understanding of the public on postponing by 18 months our pledge to raise the consumption tax rate by 2%, and that furthermore, the public renders its judgment on the Abenomics package currently under way.

REPORTER: My question pertains to the previous question. Including today, there are three days are left until dissolution. Meanwhile, there are bills that have yet to be passed, such as the bills related to the vitalization of local economies, which Prime Minister Abe and the Abe administration identify as a top priority. The opposition parties are intent on not attending future Diet deliberations, perhaps as a show of opposition. What action will be taken with these bills? Can you explain the Government’s outlook?

CHIEF CABINET SECRETARY SUGA: These bills need to be passed no matter what in light of the situation, in particular, the situation in the regions. Therefore, if there are opposing views, I hope members of the opposition parties will attend the committee deliberations at the Diet and speak out. In any case, the Prime Minister has declared that he will resolve the House of Representatives on the 21st. In that respect, I expect the parties and the Diet will arrange to have the bills passed before the dissolution.

REPORTER: I have a related question. You said that you wished to have the bills passed no matter what. If the opposition parties are absent, is it then possible that the bills would be forced through the Diet?

CHIEF CABINET SECRETARY SUGA: That will be decided at the Diet upon holding the Committee meeting and seeing if opposition parties attend.

REPORTER: My question is in connection with this matter. Along with the bills for the vitalization of local economies, I believe the Abe administration is also pushing for the passage of the bill for facilitating women’s active role in society during the current session of the Diet. The present circumstances of the Diet are making the passage of this bill extremely unlikely. Can you please share your comments?

CHIEF CABINET SECRETARY SUGA: I am aware of the challenging circumstances. However, there are still many more bills that can be passed at the Diet during the limited time available. I gather that members of the Diet will be making every effort to ensure the passage of these bills by the 21st.

REPORTER: Does that mean that the bill for facilitating women’s active role in society will be passed during the next session of the Diet?

CHIEF CABINET SECRETARY SUGA: If the bill fails to be passed during the current session, then naturally I presume that it will be passed during the next session of the Diet.

REPORTER: I have a related question. The opposition parties are also criticizing the fact that 70 billion yen in tax money will be spent for the dissolution and general election of the House of Representatives. If you have a counterargument, could you please share it?

CHIEF CABINET SECRETARY SUGA: The dissolution and general election of the House of Representatives are expressly enumerated in the Constitution. In this sense, I think it is natural for the Prime Minister to seek a popular mandate.

REPORTER: I would like to ask a number of questions concerning the Prime Minister’s statements. Yesterday, Prime Minister Abe appeared on our news program, “News 23,” and discussed the postponement of the consumption tax increase to 10% to (FY)2017. The Prime Minister expressed the view that depending on the circumstances, such as a global economic crisis or extraordinary natural phenomena, the legislation could be revised to postpone the consumption tax increase once again. What other such specific examples are conceivable aside from a hypothetical global economic crisis or extraordinary natural phenomena?

CHIEF CABINET SECRETARY SUGA: During his press conference yesterday, the Prime Minister stated he would remove the supplementary provision, which allows the consumption tax increase to be postponed depending on the state of the economy, from the standpoint of achieving fiscal soundness. The Prime Minister stated that by further advancing the “three arrows” of Abenomics over the remaining three years, that is, over the period until the increase, economic conditions benefiting the increase would be created. The Prime Minister expressed his unwavering resolve to remove the supplementary provision. What the Prime Minister stated on your program was that if, even then, there are grave occurrences, such as a global economic crisis or a large-scale earthquake disaster, then he would adapt to the emergency situation by revising the legislation in response.

REPORTER: I have a related question. As you stated, my understanding is also that during his press conference, the Prime Minister expressed his unwavering resolve to achieve fiscal soundness. However, I suspect that questions will be raised over this so-called loophole that the Prime Minister is referring to. Moreover, there are questions as to whether it is all that different from the existing provision that allows the Prime Minister to make decisions based on the economic climate. What is your opinion in this regard?

CHIEF CABINET SECRETARY SUGA: I do not find that to be the case at all. My impression is that the Prime Minister was simply answering the question that he was asked. It is not something the Prime Minister brought up himself. Because the Prime Minister was asked what he would do in such circumstances, he stated that it would be completely irresponsible to neglect a large-scale earthquake disaster or a global economic crisis, and therefore, they would be dealt with by revising the legislation. The existing provision on economic conditions provides that drastic changes in the state of the economy would be dealt with in a flexible manner. As such, the situation is not at all as you stated.

REPORTER: In other words, there will be no change to the Prime Minister’s view that the tax will be increased without fail, as he stated during his press conference?

CHIEF CABINET SECRETARY SUGA: It will never change.

REPORTER: On the same TV program, the Prime Minister touched on the Act on the Protection of Specially Designated Secrets. The Prime Minister stated that he would resign in the event that there was repression of the media. I have never heard the Prime Minister say this, even during the Diet deliberations. Can this comment be taken at face value?

CHIEF CABINET SECRETARY SUGA: Yes, I believe so. For example, there were media reports the legislation would mean that films could no longer be produced, which is not something that would ever happen. I gather that the Prime Minister made his comment in the context of explaining that something like that would never happen.

REPORTER: I have a question regarding social security. The Government had planned on enhancing its social security services with the anticipation that the consumption tax would be increased to 10%. Now that the increase has been postponed for a year and a half, will the services still be implemented as planned?

CHIEF CABINET SECRETARY SUGA: First of all, I have long stated that we should review both the scenarios of increasing and not increasing the consumption tax. The same was true when the consumption tax was first increased from 5% to 8%. Every possible effort will be made to implement the services in the process of formulating the budget. Among the services, we had pledged to launch a new child-rearing support system in April of next year. Therefore, we hope to execute and implement such services as planned.

REPORTER: I have a related question. How do you intend to finance these services?

CHIEF CABINET SECRETARY SUGA: It is with such considerations in mind that we deem the launch of the new child-rearing support system to be feasible.

REPORTER: In relation to the previous question, are you saying that the postponement of the tax increase will make it difficult to provide services other than child-rearing support services?

CHIEF CABINET SECRETARY SUGA: While I do believe that the schedule for the social security enhancements will need to be reviewed for the duration of the postponement, we hope to stay close to the plan as much as possible by making every possible effort during the budget formulation process.

REPORTER: My question is in regard to the child-rearing support services. The Prime Minister also said that efforts would be made to secure as much funding as possible. Some media have reported that revenue from “bridging bonds” will be appropriated to finance the services. Are such measures being considered?

CHIEF CABINET SECRETARY SUGA: I am not aware of this. In any case, the Prime Minister just announced the postponement during yesterday’s press conference. The Government hopes to realize, for example, the new child-rearing support system to be launched in April of next year, as it is a priority program for supporting working women and achieving a society in which all women shine. I believe the Prime Minister has instructed financial authorities to pool their wisdom to find sources of funding for these programs.

REPORTER: In my opinion, such revisions should be made in concert with the postponement decision, as they are major policy choices. If there are going to be programs that cannot be implemented, in my view, the Government should explain which programs would be sacrificed. This should be presented as a policy package. Will it become clear before the elections which services will be feasible?

CHIEF CABINET SECRETARY SUGA: Yes, it is reasonable to say that, during the budget formulation process.

REPORTER: During the budget formulation process? How about before then?

CHIEF CABINET SECRETARY SUGA: We will make every effort to achieve the social security enhancements during the budget formulation process.

REPORTER: During the election campaign, will proposals be made on ways to finance the programs based on the available options? Will such proposals be made before election day?

CHIEF CABINET SECRETARY SUGA: So as I said, we hope to launch the new child-rearing support system as scheduled in April of next year. We will of course be explaining how this will be financed, among other matters.

REPORTER: I have a question that is tangentially related. It is about the work of formulating the FY2015 budget. As of now, does it look as though this work will be finished by the end of this fiscal year? Also, what are the prospects for passing the budget by the end of this fiscal year?

CHIEF CABINET SECRETARY SUGA: Of course, we will be working with the goal of having it passed by the end of this fiscal year.

REPORTER: How about the formulation of the draft budget?

CHIEF CABINET SECRETARY SUGA: In terms of its formulation by the end of the year? As the Prime Minister has not yet decided about the personnel appointments of the party and the ministerial appointments following the election, I would like to refrain from making comments at this point in time based on the current status. However, it is our basic policy to proceed with work and minimize disruptions. 

REPORTER: My question concerns your fiscal reconstruction goal. The Prime Minister stated that the Government would stay the course towards its goal for fiscal soundness to be achieved by FY2020. As of now, what is your outlook on achieving your goal of halving the primary balance in FY2015? How is this affected by the tax increase postponement?

CHIEF CABINET SECRETARY SUGA: We will make the utmost efforts to achieve this goal..

REPORTER: I would think the scale and other aspects of economic measures might also be affected?

CHIEF CABINET SECRETARY SUGA: We will make the utmost efforts to halve the primary balance deficit in FY2015. Furthermore, we will draw up concrete plans for achieving our goal for fiscal soundness by FY2020 as planned.

REPORTER: I have a question related to the previous question. As I recall, the Prime Minister stated at his press conference yesterday that something would be prepared by next summer.

CHIEF CABINET SECRETARY SUGA: The Prime Minister stated that by next summer, we would draw up concrete plans for achieving our goal for fiscal soundness by FY2020.

REPORTER: To confirm then, before the election is held, there will be no discussions on how fiscal soundness will be achieved?

CHIEF CABINET SECRETARY SUGA: We have pledged that fiscal soundness would be achieved by 2020.