Press Conference by the Chief Cabinet Secretary (Excerpt)

Opening Statement by Chief Cabinet Secretary Suga

(Abridged)

At an extraordinary Cabinet meeting held today, the Cabinet approved the following policies: the Basic Policies for Economic and Fiscal Management and Reform 2017, the Investments for the Future Strategy 2017, the Regulatory Reform Action Plan, and the Basic Policy for Overcoming Population Decline and Vitalizing Local Economy 2017. The Basic Policies aim to accelerate the expansion of the positive cycle of growth and distribution by raising productivity through investments in human resources. To that end, we will steadily advance the three reforms of exiting deflation and achieving economic revitalization, expenditure reform, and revenue reform, under the basic policy that there can be no fiscal soundness without economic revitalization. Under the plan for Investments for the Future Strategy 2017, we will implement a growth strategy toward the realization of Society 5.0, which will solve social challenges by incorporating new technologies into all kinds of industries and daily life. At the same time, based on the Regulatory Reform Action Plan, we will work to create a strong economy by flexibly revising regulations and systems without becoming caught up in conventional frameworks, including reform of the distribution system for milk and dairy products. Furthermore, through the Basic Policy for Overcoming Population Decline and Vitalizing Local Economy 2017 we will advance the promotion of local Abenomics, including university reforms that will contribute to vitalizing local economies, and also work to mitigate the extreme concentration of the population in Tokyo.

Q&As

(Abridged)

REPORTER: I have a question about the Basic Policies. There is no mention in the policies of raising the consumption tax rate to 10 percent in 2019 and some people believe that the Government is preparing to once again delay the tax hike. Could you explain the reason for the omission of the increase in consumption tax in the Basic Policies?

CHIEF CABINET SECRETARY SUGA: Although there is no specific mention of raising the consumption tax in the Basic Policies, as the Prime Minister himself has stated in the Diet, there is no change to our policy of raising the tax rate in October 2019. It is our responsibility to pass down to the next generation one of the best social security systems in the world, and also to ensure trust from the markets and the international community. In any event, the Government will further accelerate Abenomics and make every effort to ensure sound economic and fiscal management.

REPORTER: The Basic Policies include a target of achieving a positive primary balance by fiscal 2020. I believe that the achievement of this target would be dependent on the consumption tax rate being increased in 2019, so does the Government still maintain its target for achieving a positive primary balance?

CHIEF CABINET SECRETARY SUGA: Our targets are exactly as they are described in the Basic Policies.

REPORTER: I have a question about the general election in the United Kingdom. The ruling Conservative Party has lost its majority in parliament and it looks unavoidable that this will lead to Prime Minister Theresa May losing forward momentum in advancing policies and negotiations. What is the Government’s view of the outcome of this election?

CHIEF CABINET SECRETARY SUGA: I would like to refrain from commenting on behalf of the Government on the election results in another country. Following the election result, the Government will continue to monitor developments in the UK.

REPORTER: I understand that you do not comment on the elections of other countries. However, this result will unavoidably have an impact on the UK’s Brexit negotiations, so what is the Government’s analysis with regard to this impact?

CHIEF CABINET SECRETARY SUGA: I would like to refrain from making any speculative comments on behalf of the Government. However, the Government will continue to monitor developments in negotiations between the UK and the European Union (EU) concerning the UK’s exit from the EU. The Government seeks to minimize its impact on the global economy and also on the many Japanese companies that operate in the UK.

REPORTER: Given that the ruling party has lost its majority and government administration has become more unstable, what is the Government’s view on the potential impact on Japanese companies based in the UK?

CHIEF CABINET SECRETARY SUGA: As I have just noted, the Government will closely monitor the UK-EU negotiations. We will also make every effort to minimize the impact of the UK’s exit on the global economy and in particular on many Japanese companies that operate in the UK.

REPORTER: I understand that you wish to refrain from commenting, but what kind of response will you be requesting from the government of the UK?

CHIEF CABINET SECRETARY SUGA: I do not think that it is for us to make any kind of request. However, what is most important is for the Government to respond thoroughly to ensure that Japanese companies operating in the UK are not impacted.

REPORTER: There are concerns that the administration of Prime Minister May will be destabilized by this result, so what impact do you think that this will have on other aspects of the Japan-UK relationship? For example, the Government has been advancing security and defense cooperation with the UK in view of issues such as North Korea and incursions by Chinese vessels into Japanese waters. Will such areas of cooperation be impacted?

CHIEF CABINET SECRETARY SUGA: I do not think that will be the case.

(Abridged)

REPORTER: There are signs that government vessels of the Republic of Korea (ROK), China, and Taiwan have been engaging in marine surveys within Japan’s exclusive economic zone (EEZ). In response, the Special Mission Committee on Territories of the Liberal Democratic Party (LDP) has submitted a request to the Prime Minister, Foreign Minister, and Land, Infrastructure, Transport and Tourism Minister. Given the current situation, how does the Government intend to respond?

CHIEF CABINET SECRETARY SUGA: Japan will respond firmly in accordance with international law.

REPORTER: The LDP Special Mission Committee has recommended that Japan also enhance its marine surveys and resist efforts by other countries to enter Japan’s waters. Will the Government be making further efforts in this regard?

CHIEF CABINET SECRETARY SUGA: We will naturally do all that needs to be done.