[Title] Press Conference by Prime Minister ISHIBA Shigeru

Good evening and thank you very much for attending this press conference despite the late hour.

In the policy speech I made during this Diet session, I quoted former Prime Minister ISHIBASHI Tanzan when he stated he wanted to "reflect adequately on those points demanding reflection, and, at the same time, asking for the cooperation of both the opposition parties and others concerned, work to have the National Diet move forward without deviating." Taking that sentiment to heart, I did my very best to build consensus across party and factional lines and engage in earnest Diet deliberations.

The result was the enactment of the budget for fiscal year 2025 following amendments by the Diet, the first such case in 29 years in the House of Representatives and the first case ever in the House of Councillors. Fifty-eight of the 59 bills submitted by the Government passed, and all 13 of the treaties submitted for consideration were approved.

With regard to diplomacy as well, taking advantage of the opportunity afforded by Expo 2025 Osaka, Kansai, Japan, I have met with the leaders of nearly 40 countries since the beginning of the year. I have also visited the United States of America and four ASEAN (Association of Southeast Asian Nations) member countries since 2025 began.

At the recent G7 Summit in Kananaskis, Canada, I emphasized that the situations in Ukraine, the Middle East, and East Asia are all closely tied to each other, and, accordingly, the G7 should remain united as it continues to lead the response by the international community. I understand that this point was endorsed by all the other countries participating.

I also held summit meetings with President Trump of the United States, President Lee Jae Myung of the Republic of Korea, who had only just taken office, and a number of other national leaders.

As the responsible ruling party, I feel that we succeeded in delivering results to a certain extent thanks to the support of a truly significant number of people, and I would like to once again express my sincere appreciation to all those who kindly cooperated with us during this Diet session. Thank you very much indeed.

Grounded in the discussions held during this Diet session, and with a view to realizing a Japan where people can feel tangibly that tomorrow will be better than today, we will work to raise Japan's nominal gross domestic product from 600 trillion yen at present to 1,000 trillion yen by 2040. We will also aim to increase the average income, which currently stands at 4 million yen, by more than 50 percent by that time.

We will pursue three approaches to ensure these come to fruition.

First, we will put an end to people's worries about today by pressing ahead with our responses to issues affecting people at this very moment, including the matters of wage increases and measures to counter rising prices.

Next, we will dispel public unease about tomorrow, sweeping that anxiety away by mounting responses to the U.S. tariff measures, ensuring people's safety and security, and reforming social security.

And third, we will create a future full of hope by promoting regional revitalization and investment. We will create a society in which those who want to have children can do so and raise them with peace of mind. Our annual number of births has now dropped below 700,000. As I have been saying since my time as Minister for Regional Revitalization, this trend towards having fewer children can properly be called a "quiet emergency" and we must reverse this trend at all costs.

First of all, with regard to putting an end to people's worries about today, this year we saw wage increases exceed 5 percent for the second year in a row. We expect this year's rate of increase to surpass that of last year, which itself marked the highest level of increase in 33 years. Through legislative revisions, we also succeeded in raising adjustment allowances for public school teachers for the first time in approximately 50 years.

In order to bring about a society in which it is the expected norm for real wages to increase by about 1 percent annually, we will vigorously implement a package of measures that will, among other initiatives, over five years promote 60 trillion yen of productivity-enhancing investments at small- and medium-sized enterprises and small-scale employers.

We will raise government-set prices in the areas of medical care, nursing care, childcare, and welfare, all of which are facing labor shortages and rising prices.

We will continue our tireless efforts to address the minimum wage, aiming to attain our ambitious national average wage target of 1,500 yen per hour within the 2020s. The public and private sectors will make their greatest possible efforts intensively, over the span of five years.

We will also conduct a comprehensive assessment to determine whether or not budgetary, tax, and other benchmarks have perhaps been left for too long at the low levels appropriate for a deflationary period; after completing this assessment, we will move forward on revising the necessary areas.

To cover the period until we succeed in bringing about wage increases that outpace rising price, we are responding by providing 30,000 yen to each low-income household, with an additional 20,000 yen for each child; also, by raising the benefit rate to the equivalent of 100 percent of take-home pay when childcare-related leave is taken, for households raising children; and, in the case of disincentives for second earners to earn more than a certain amount of income annually, we raised the threshold from 1.03 million yen, resulting in income tax reductions of 20,000 to 40,000 yen.

However, we still have not achieved wage increases that outpace inflation. I consider this to be something that must be addressed without fail. Therefore, we have pledged to realize a new benefit payment without relying on the issuance of deficit-financing bonds. It will focus primarily on those who are truly in need, and therefore will not be a kind of indiscriminate or wasteful subsidy.

In particular, regarding food expenses, an area in which rising prices have been especially noticeable, we will, taking into account the impact of recent rising prices, provide 40,000 yen in benefits for each child as well as 40,000 yen for each low-income adult, with others receiving 20,000 yen per person. To put it simply, the fact that wage increases have not surpassed price increases is something we must contemplate humbly and sincerely.

I must emphasize yet again that the consumption tax is a critical source of funds supporting healthcare, pensions, nursing care, and other programs within social security. A stable source of funding for social security is of the utmost importance. We could not possibly do such an irresponsible thing as reducing the rate of the consumption tax, the funding source for healthcare, pensions, and nursing care, unless we have an alternative stable source of funding.

[If we were to take an approach of lowering the consumption tax rate,] high-income earners who consume more would end up enjoying a greater reduction in their tax burden than those who consume less. That would be unavoidable. The result would be high income earners ending up with a more advantageous outcome than others. Is that really what we want to do?

Besides that, judging from past experience, since modifications to the system would be necessary, we anticipate that roughly a full year would be needed, from amending the law to actually carrying out the change in the tax rate. Reducing the consumption tax rate would take time to implement, disproportionately favor high-income earners, and, most crucially, present a risk to our funding for social security programs. As a result, I do not believe it is an appropriate solution in any way.

As a further form of support for households raising children, we will move forward with initiatives such as making senior high school effectively free as well as making lunches free of charge at elementary schools, based on an agreement with Komeito and the Japan Innovation Party.

As for the "employment ice-age generation" [who have encountered career challenges as a result of entering the workforce when there were few job opportunities], we must not allow fairness or unfairness to be determined by the generation in which one happens to be born. And so, aiming to be a nation where no such unfairness exists, we will bolster our reskilling efforts [(measures to assist people in brushing up their skills in order to transfer into growth fields)] and our assistance for building assets with a view to preparing for old age.

With regard to the price of rice, we are moving forward with the sale of 500,000 tons of rice reserves through discretionary contracts. Changes in the market have been appearing steadily, with the average price now starting to decline. Five kilograms now sell for 3,920 yen on average.

We will verify the causes of the sharp jump in prices and confirm the responses we have taken, and undertake a shift in our polices from the perspective of food security as well, in order to enhance productivity, increase added value, and expand our exports. As we enable consumers to feel secure in purchasing rice, we will at the same time realize rice policies that make it possible for motivated producers to increase production free from worry.

It is also imperative for us to address the rise in energy prices. We are currently implementing a 10 yen per liter fixed reduction in the price of gasoline.

In anticipation of possible sharp rises in the price of petroleum products because of the escalating tension in the Middle East, beginning this Thursday, June 26, we will institute precautionary assistance that will use surplus funds to dampen drastic fluctuations in fuel prices, extending through all of July and August, when an increase in demand is expected.

As for gasoline specifically, giving particular consideration to the burden shouldered by local areas where few public transportation options are available, in addition to our existing measures to reduce the price of gasoline by a fixed amount, we will institute measures aiming to ensure that retail prices do not rise beyond recent levels, which are right around the price level at the time of the Ukraine crisis.

Looking now to the matter of abolishing provisional tax rates, based on an agreement with Komeito and the Democratic Party For the People, we will come to a conclusion once we ensure stable sources of funding for the development, maintenance, and management of social infrastructure. That is to say, we will reach a conclusion on this matter in tandem with making sure that stable funding sources are well in place.

With regard to electricity and gas bills, we will provide support during the hottest months of July through September, lowering bills by roughly 3,000 yen for the average household.

Next, to dispel public unease about tomorrow, as we address the United States' additional tariff measures, Japan, grounded in a policy of "investment over tariffs," will persist in its all-out efforts to realize an agreement that mutually benefits both Japan and the United States, even as Japan continues to defend its national interests.

We will furnish meticulously-tailored responses during consultations conducted at our 1,000 special consultation service locations all around the country. We will provide comprehensive support for domestic industries, including through assistance addressing cash flow problems at midsize and small- and medium-sized enterprises. We will set additional measures in motion as needed, without delay.

Japan is one of the countries most frequently affected by natural disasters anywhere. Reflecting that, our system for disaster prevention must be the very best in the world. Even as we continue our efforts for recovery and reconstruction from the Great East Japan Earthquake and the Noto Peninsula Earthquake, during this Diet session, we undertook legal revisions and decided to strengthen our cooperation with volunteer organizations, our provision of welfare services to disaster victims, and measures that will facilitate the early restoration of roads, waterworks, and other infrastructure.

I have mentioned the Sphere Standards (standards in line with the Humanitarian Charter ensuring minimum standards in humanitarian assistance) on a number of occasions in the Diet, but as we work to improve the living conditions in evacuation centers, we will advance our preparations, including quadrupling the number of light trucks equipped with toilet facilities that we have at the ready and also preparing food trucks, cardboard beds, and so on.

It is only fitting to work to improve the environment for those in evacuation centers, who find themselves in the most trying circumstances. This fiscal year, we doubled both the budget and the personnel for disaster prevention at the Cabinet Office's Disaster Management Bureau. In fiscal year 2026, we will establish a dedicated Disaster Management Agency, which will be led by a specialized minister, staffed with a suitable number of experts, and given a sufficient budget.

In order to respond to the most severe and complex security environment of the post-war era, we are moving ahead in the fundamental reinforcement of our defense capabilities. We have also bolstered our deterrence capabilities by establishing systems to neutralize servers that are used to launch cyberattacks against us.

Improving the treatment of our Self-Defense Forces (SDF) personnel is an urgent issue for reinforcing our defense capabilities. No matter how superb the ships, land vehicles, or aircraft we possess, they will be useless if we lack sufficient SDF personnel to operate them. As the result of efforts grounded in the Basic Policy document compiled under the direction of the meeting of ministers having remits related to SDF affairs (the "Basic Policy on Improving the Treatment and Working Environments and Establishing New Lifetime Career Plans of SDF Personnel"), 50 percent of SDF members responding in a survey said that their motivation to work has gotten stronger. We also recognize effects emerging such as fewer SDF personnel resigning mid-career. We will redouble our efforts to improve the treatment afforded to SDF personnel.

We will continue to carry out all possible measures to ensure the safety of Japanese nationals overseas, including our responses to the current situation in the Middle East.

Turning now to the pension system, we did away with the earnings threshold that disincentivized second earners from receiving wages exceeding 1.06 million yen annually and also set in place reforms that will allow people to receive more generous pension benefits. Through an agreement with the Constitutional Democratic Party, we decided to set up measures that avoid reducing the basic pension level in the event of the economy failing to do well in future years. We carried out reforms we implement every five years and have secured the benefits to be paid out to both current and future recipients.

As for how to deal with high-cost medical expense benefits, we will take the utmost care in attending to the matter after listening to a wide range of views, reflecting the lessons we learned through our attempt to address this matter recently.

Based on an agreement with Komeito and the Japan Innovation Party, we will reduce the financial burden shouldered by the general population, including the insurance premium burden borne by the working-age generation, by reducing the number of hospital beds to the optimal level, among other changes.

We will examine initiatives that include fostering the environment for painless childbirth, popularizing breast cancer screenings that take into account the burden borne by women, and enhancing women's restroom facilities. We will steadily advance our efforts to conduct reviews that lead to a society in which women can live their lives with peace of mind.

A fiscal surplus is absolutely necessary in order for us to respond to large-scale disasters and to emergencies. For that reason, we will work to put public finances on a sound footing, aiming to achieve a surplus in the primary balance at the earliest possible time during the 2025 and 2026 fiscal years while simultaneously working to reduce our debt-to-GDP ratio in a stable manner to the level we had before the COVID-19 pandemic.

Finally, I wish to touch on creating a future full of hope.

As the result of implementing various measures aimed at transitioning from a cost-cutting economy to an economy based on the creation of high amounts of added value, a change in the tide has emerged in both wages and domestic investment.

The key to maintaining and accelerating this will be Regional Revitalization 2.0 and the promotion of investment, in addition to higher wages.

Under Regional Revitalization 2.0, we will make the greatest possible use of new technologies, including artificial intelligence (AI), robots, and drones, establish a Local Area Resident Registration System and create a connected (non-permanent but engaged) population of 10 million people. By doing so, we will achieve economic growth even as the population declines and maintain and enhance the vitality of local communities.

In line with our Basic Vision (the Basic Vision for Regional Revitalization 2.0), we will vigorously pursue "the Reiwa Era remodeling of the Japanese archipelago" through new public-private partnerships that make use of the strengths of the private sector to the greatest possible extent.

We will accelerate public-private investment in promising fields, including not only green transformation (GX), digital transformation (DX), economic security, and the content industry, but also health care and disaster prevention, and we will expand employment and exports in these areas. We will promote investment into Japan, aiming to become a nation built on industry.

We will boost our efforts to create innovation for the future by facilitating strategic research and development, inviting outstanding trainees to Japan, and providing support for startups, among other endeavors.

In line with these three approaches, we will first of all mobilize our existing budget and policies to carry out precise economic and fiscal management.

After the House of Councillors election concludes, we intend to give concrete shape to the content of our Basic Policies 2025, the Action Plan for a New Form of Capitalism, our Basic Vision for Regional Revitalization 2.0, our pledges for the House of Councillors election, and other policies, and then steadily transition them into implementation.

I will end my opening remarks here. Thank you very much.