Press Conference by the Chief Cabinet Secretary (Excerpt)

Q&As

REPORTER: I have a question about the International Finance and Economic Assessment Council, a meeting of which was recently held. It appears that in the meeting, Professor Joseph Stiglitz of Columbia University gave his assessment that the global economy is stagnating and that this calls for a focus on fiscal policy, in addition to which he expressed the need for caution about raising the consumption tax rate. What opinions did you hear in the meeting?

CHIEF CABINET SECRETARY SUGA: Firstly, this morning the first meeting of the International Finance and Economic Assessment Council was held. To this first meeting the Government invited from the United States Professor Joseph E. Stiglitz, Professor at Columbia University, recipient of the Nobel Memorial Prize in Economic Sciences, and former chair of the U.S. President’s Council of Economic Advisers, to provide his analysis and outlook for the global economy. In the meeting Prof. Stiglitz emphasized the need to engage in coordinated international efforts and implement structural reforms to boost global aggregate demand, against the backdrop of increasing uncertainty in the global economy. Prof. Stiglitz also expressed his expectation that as Japan is the Chair of the G7 Summit this year, Prime Minister Abe’s Abenomics would set a good example. Overall it was a very meaningful meeting. As we head toward the Ise-Shima Summit, the Government wishes to hear the views of experts from Japan and overseas with regard to the state of the global economy and international finance. In that context, in this morning’s meeting Prof. Stiglitz explained that in an economic situation in which countries and regions such as the United States, Europe, and China are experiencing weak growth, internationally coordinated efforts are required that would serve to boost global aggregate demand and policies are needed to boost government expenditure, increase corporate and personal expenditure, and enhance equality in income and living standards.

REPORTER: Following the meeting Prof. Stiglitz expressed the need for caution with regard to raising the consumption tax rate. Did this comment come from Prof. Stiglitz himself, or was he asked for his opinion on tax increases by a member of the Government?

CHIEF CABINET SECRETARY SUGA: Firstly, the objective of today’s meeting was not to make a decision on raising the consumption tax rate. Prof. Stiglitz’s comments were on the tax system, in which he remarked that now is not the right time for a rise in the consumption tax, from the perspective that such a rise would not stimulate increased aggregate demand. He suggested that measures that could be considered effective in increasing aggregate demand were carbon taxes and inheritance taxes and that taxes designed to enhance equality would also have the effect of boosting aggregate demand.

REPORTER: I have a related question. Prof. Stiglitz stated that there are limits to what financial policy can achieve and that fiscal stimulus is also required, and he noted that this is something that not only Japan, but also the governments of other countries should consider. Given this proposal, is the Government contemplating any kind of response now that the budget for FY2016 has been passed?

CHIEF CABINET SECRETARY SUGA: The objective of these council meetings is to hear opinions on the global economy and international financial situation in the run-up to the G7 Summit. Therefore the objective is not to seek to formulate specific policies. Ahead of the G7 Summit, the views and advice received from the experts in the council meetings will be used as a source of reference for the purposes of engaging in international discussions and formulating plans relating to economic policy.

REPORTER: You just mentioned that Prof. Stiglitz’s advice was that now is not the right time to raise the consumption tax. Frankly speaking, does the Government intend to use this advice as a source of reference?

CHIEF CABINET SECRETARY SUGA: In any event, as I have just stated, the International Finance and Economic Assessment Council has been planned as a forum for hearing views and opinions on the global economic and financial situation in the run-up to the G7 Summit, covering a broad range of issues including the global economy, international finance, and energy, among others. Therefore, as the Chair of the G7 Summit, the Prime Minister will consider such opinions when compiling specific policies. Today in the meeting the tax system was discussed.

REPORTER: On a related note, in a press conference following the meeting Prof. Stiglitz stated his opinion with regard to the economic situation that 2015 was the weakest year since the global financial crisis and that 2016 will likely be even weaker. Does the Government share this view on the global economic situation?

CHIEF CABINET SECRETARY SUGA: I believe that Prof. Stiglitz was stating his considered analysis and outlook for the global economy as an economist. Therefore both Prof. Stiglitz and the Government will continue to assess ways to respond to the situation.

REPORTER: On a related note, could you tell us if any person attending the meeting, such as the Prime Minister, expressed an opinion concerning Prof. Stiglitz’s comment that now is not the right time to raise the consumption tax?

CHIEF CABINET SECRETARY SUGA: No-one expressed an opinion.

(Abridged)