Japan Press Weekly

Tweet

2011 May 11 - 17 TOP3 [POLITICS]

DPJ gov’t accelerates privatization of public services

The Democratic Party of Japan-led government, even after the March 11 disaster, is intending to further promote the policy to privatize public services.

The DPJ government is continuing with the “structural reform” policies and the “decentralization” policies implemented by the former Liberal Democratic-Komei government. These policies called on local governments to reduce the number of public hospitals and fire-fighting capabilities, and undermined local government administrative functions through measures cutting the number of public workers and promoting the merger of municipalities.

The bill to revise the PFI (Private Finance Initiative) Law is currently under deliberation in the House of Representatives. The bill proposes establishing a right to privately operate public facilities.

The PFI Law was enacted in 1999 with the aim to utilize private funds to construct, maintain, and operate public facilities.

If the law is enacted, local governments will be able to sell the right to operate their public facilities to private companies. These private companies will also be able to decide how much to charge for the use of the facilities, which is now set by local assemblies.

With the amendment, local governments will be able to sell the right to operate water and sewage facilities and public hospitals.

The revision of the PFI Law allows private-sector companies to make profits through operation of public facilities and utilities.

The Government Revitalization Unit on April 28 approved a program regarding reforms in public services. The program calls for a change in relevant laws so that collection of arrears, such as delinquency in paying taxes and national insurance premiums, will be outsourced to private collection companies.

Since the law regarding the national health insurance program was revised in 2002, many local governments use private firms to collect national health insurance premiums from their residents. Due to companies’ aggressive collection tactics, a number of people committed suicide. The program may further aggravate the situation.