structural reform2

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Cabinet approves 'market test' bill to contract out more public services

The Koizumi Cabinet on February 10 approved a public service ﾒimprovementﾓ bill to introduce a "market test" to contract out public services through competitive bidding in which both public and private sectors will take part.

The government plans to introduce the new system in FY 2006 in six fields, including unemployment offices and city-hall reception desks.

The Koizumi government intends to use the "market test" to have as many public services as possible contracted out to the private sector under the slogan "From public to private." The aim of the bill is to open up new markets to private companies. Business circles perceive it as a very rare 　 big business chance.

A government panel on deregulation and privatization policies defines the "market test" policy as an ﾒimportant measure to realize a 'small and efficient government'.ﾓ It also made clear that the new system should be applied to "all conceivable public services." It has already been introduced as model businesses in this fiscal year, which has enabled private companies to take part in eight services in three fields such as unemployment office related work, the collection of the national pension tax, and prison security and auxiliary work. The government plans to expand the target services every year, and coupled with overall payroll cuts for government employees, it is going to transfer as many public services as possible to the private.

The National Confederation of Trade Unions (Zenroren)-affiliated Japan Federation of Prefectural and Municipal Workers' Unions (Jichiroren) issued on the same day a statement criticizing the bill. It pointed out that, if enacted, the bill will lead to (i) degeneration of official functions and public services to secure citizen's lives, livelihoods, and rights into a profit-making venture for private companies; (ii) imposition of privatization of services on local governments in violation of the principle of local autonomy; and (iii) danger of massive leaks of and misuse of personal information for other purposes. The statement calls for a nationwide movement to block the bill and the introduction of the "market test" to local governments.
- Akahata, February 11 and 14, 2006