Japan Press Weekly

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2011 January 19 - 25 [POLITICS]

Kan’s policy speech calls for promotion of TPP and consumption tax hike

Prime Minister Kan Naoto vowed to promote Japan’s participation in a regional free-trade pact and a consumption tax hike in his policy speech on January 24.

Calling for creation of a “society in which human suffering is reduced to a minimum,” Kan stressed the need to “reform the social security system.” However, without proposing specific items to be revised, the only clear measure he mentioned was to “ensure stable fiscal resources.”

“It is inevitable to have to ask the public to bear the burden to some extent,” said Kan, stating that his cabinet will set forth by June a basic policy on a fundamental reform of the tax system, including the consumption tax.

On the other hand, the prime minister has decided to reduce the effective corporate tax rate by 5% and to keep the preferential securities tax rate at 10% (previously set at 20%) for two more years.

Claiming to open the country to growth and employment, Kan called on the nation to take part in the Trans-Pacific Partnership Agreement.

The government’s estimate indicates that Japan’s participation in the TPP will bring the nation’s self-sufficiency rate in food down to 13%, far from the 50% the government aims at achieving.

Although Kan called for a revival of agriculture, forestry, and fishery industries while simultaneously promoting the entry into the TPP, he stopped short of addressing the issue concerning the self-sufficiency rate.

The prime minister said, “The Japan-U.S. alliance is the cornerstone of Japanese diplomacy and national security and also a publicly shared asset fostering the stability and prosperity of not only the Asia-Pacific region but also the world.”

While stating, “It is deeply regrettable that only in Okinawa the reduction of (base) burdens lags behind,” Kan vowed to realize the Japan-U.S. agreement reached in May to “relocate” the U.S. Futenma base to Okinawa’s Henoko district.