[Title] Policy Speech by Prime Minister Ryutaro Hashimoto to the 139th Session of the Diet
I would like, at the start of this 139th Session of the Diet, to state my views on the major policy issues before us.
At the previous Session of the Diet, I was elected to again bear the heavy responsibilities of Prime Minister. As such, I am determined to do my very best to manage the affairs of state so as to respond to the support and expectations of the people.
At the outset, I should say I am disheartened at the recent rash of incidents that can only undermine public trust in the government. It is a sad day indeed when I must repeatedly remind the civil service to maintain the highest moral standards. Yet we must, and I call upon all civil service personnel as strongly as I can to take the state of the nation into consideration, to realize that they are the servants of all the people, to maintain strict self-discipline, and to do their jobs with a renewed sense of pride and mission. At the same time, I am painfully aware of politics' responsibilities here
With the advances in telecommunications technology and the end of the Cold War, the world is rapidly becoming one global community and dramatic changes are taking place as we move to a new society in which people, products, capital, and information flow freely. At the same time, Japan faces a myriad of issues, including the rapid aging of the population, the budget crisis, and the hollowing out of industry, which, if left unattended, could well result in Japan's being left behind by the global tide. For present generations and future generations alike, now is the time to embark upon "reform and creation" in politics, government, the economy, and society.
My aim is to create a society in which each and every person can have dreams and aspirations for the future and can achieve his or her full potential. To this end, my Cabinet has identified five areas of reform: administrative reform, economic structural reform, financial system reform, social security structural reform, and fiscal structural reform, and made them my government's top priorities. With cooperation based upon the tri-party agreement, and in cooperation with all who share my policy orientation, I will make every effort to implement these reforms so that all of the people can greet the new century with hope.
The various issues involving Okinawa are, together with the five reforms, among the highest priority issues before this Cabinet. The burden of sustaining the Japan-U.S. security arrangements should, by all rights, be borne equally by the entire nation. I have therefore made the utmost efforts to build relations of trust with the people of Okinawa based upon the stance that the heavy burden they have borne should be shared by the entire nation, and I will continue to devote every effort to this issue's solution.
People-first Administrative Reform Centering on Restructuring the Central Government Ministries and Agencies
It is axiomatic that administrative reform is a central concern. Japan's administrative system served us well in the early postwar years when the policy goal was clearly to achieve efficient economic development while overcoming poverty and alleviating inequality, but its limitations have become obvious in recent years as it has come up against a maze of complex and varied issues. It is essential that we undertake a radical review of the whats and hows of administrative services so that they can respond to the changing times and can effectively serve the people's needs.
I am determined to promote people-first administrative reform centering on the restructuring of the central government's ministries and agencies. The Administrative Reform Council, that I myself chair, will study the three issues of (i) what functions the state should fulfill in the 21st century, (ii) how the government should be restructured to perform these functions better, and (iii) how best to strengthen the Kantei's functions, and I expect this Council to have recommendations ready within a year of its establishment. In line with these recommendations, my Cabinet will submit the necessary legislation to the fiscal 1998 Ordinary Session of the Diet and will, following these bills' passage, work to bring other laws and regulations into line with these reforms and make the other preparations so that the government can start to shift to the new structure within five years at the latest and if possible by January 1, 2001 - the first day of the new century. Even before this overall restructuring of the central executive structure, I intend to submit the necessary legislation for the Bank of Japan and financial administration mechanisms to the next Ordinary Session of the Diet in line with the ruling tri-party recommendations on reforming the Ministry of Finance.
I have suggested that state functions might well be divided into the four areas of (i) those foreign policy, defense, public order, fiscal policy, and other functions needed for the perpetuation of the state, (ii) those economic and industrial, land husbanding and development, science and technology, and other functions needed to enhance the national wealth, (iii) those social welfare, employment, environmental, and other functions needed to protect the people's lives and livelihoods, and (iv) those educational and other functions needed to foster and transmit Japanese culture. I have made this proposal because I believe the first imperative is to generate broad-based discussion of state functions. Re-engineering the central executive structure is more than simply moving administrative functions around. Not taking the current functions as givens, we must fully consider where the state's mandate runs and then figure out what administrative structure best meets these needs. I very much hope to achieve the three aims of creating a structure capable of responding flexibly to the social and economic changes ahead, creating broad categories making it possible to formulate and implement comprehensive policies in the people's interest, and adopting a structure in which the offices responsible for the various policies can respond quickly and effectively under Kantei leadership.
People-first reform demands that we work to reform the central executive based upon promoting bold regulatory liberalization and deregulation and bureaucratic downsizing through transferring responsibilities to the local governments and the private sector. On regulatory liberalization and deregulation, we will revise the Deregulation Action Program again by the end of next March in line with the Administrative Reform Committee's recommendations centering on the six main areas of telecommunications, logistics, finance, land and housing, employment, and health and welfare; but we will not stop there. We will also work to ensure that the only regulations we have are the ones we need, which means abolishing economic regulations in principle and conducting a ground-up review of social regulations. On the division of responsibilities between the public and private sectors, we will conduct a thorough sector-by-sector study in line with the criteria set forth by the Administrative Reform Committee. On decentralization, we will move quickly to draw up an effective plan to promote decentralization systematically and comprehensively as soon as we get specific guidelines from the Committee for the Promotion of Decentralization. Very aware of the precarious state of local government finances, I fully expect the local governments to undertake determined administrative and fiscal reform so that they can fulfill their responsibilities. My Cabinet will work for the early passage of a law guaranteeing broad access to government-held information. Although resistance and difficulties are inevitable, I am fully committed to the cause of administrative reform and hope the people will give this effort their unstinting support and cooperation.
Economic Restructuring to Prepare for the Hollowing Out of Industry and the Aging of the Population
The economy is achieving a gradual recovery, but, unlike past recoveries, the situation remains grim for employment and for small and medium enterprises. Over the long term, there is concern that, as the population grows older and the working population declines, our potential economic growth could decline with it. While it is only natural that we should do everything we can to promote economic recovery, it will be impossible to achieve higher standards of living or to have a sound fiscal position and quality welfare programs unless we have the economic and technical prowess needed to grow our wealth. In this new era in which there has been a dramatic increase in cross-border business and national systems themselves are becoming a major determinant of industrial competitiveness, enhancing the economy's overall efficiency and flexibility is a national policy priority. It is essential that we move quickly to effect comprehensive policies for economic restructuring lest we fail to respond in time to the hollowing out of industry and the full-scale aging of the population.
The creation and expansion of new industries is central to stemming hollowing out, and this means it is essential that we respond in the three areas of capital, science and technology, and human resources so that new business sectors can take root and grow strong. Looking at science and technology in particular, just as we will promote enhanced basic research and closer ties among business, academia, and government, we will also promote technology development policies in telecommunications, biotechnology, and other fields as necessary. On the human resources front, we will make an effort to create a climate conducive to the emergence of creative and innovative researchers, engineers, and managers. At the same time, knowing that "supporting industries" and small and medium enterprises are the backbone of Japan's international competitiveness, we will also promote anti-hollowing policies for those regions that have especially high concentrations of technology and other skills so that the supplier and smaller firms underpinning the regional economies can stay strong and employment remain vigorous. Likewise, we will work to ease and abolish regulations across the board, to reform the various corporate and labor regulations, and to lay the foundations for the more efficient movement of people, products, and information so as to rectify Japan's high-cost structure and hence to make Japan a more attractive arena for business and to create quality employment opportunities.
In order that these reforms be forcefully promoted by the entire government, my Cabinet will decide by the middle of next month on the basic policies and which issues should be tackled first and will then develop a plan by next spring to promote those reforms to be fleshed out starting in fiscal 1997. In formulating the budget for fiscal 1997, I will personally make the final decision on policy priorities for the special measures for economic restructuring and will instruct the Minister of Finance accordingly.
Restoring Tokyo's Position as an International Financial Center Alongside New York and London
We are also seeing hollowing out in the financial sector. Financial systems in the United States and Europe have been radically transformed over the last decade with the emergence of new financial technologies and new financial products backed by dramatic deregulation and advances in information processing and communication technology. Likewise, Europe will soon see the birth of a new unified currency, the Euro, and it is important that we enhance the yen's international standing. Financial system reform is essential to creating opportunities for the effective management of financial assets in Japan, which has a massive ¥1,200 trillion in private financial assets and which faces major population aging, and our channeling these funds into new business sectors and other growth areas and making them easily available to international markets should lead to enhanced prosperity not only for Japan but for all the world. From the consumer's perspective, the reform promotes broad-based competition in the banking, securities, and insurance sectors, allows firms to handle a wider range of products, and hence enables the individual consumer to select from a wider range of products and services. Determined to restore Tokyo's position as an international financial center alongside New York and London by the year 2001, the entire government will work as one for liberalization and deregulation, for enhanced disclosure, and for reviewing and strengthening budgetary and legal provisions in keeping with the three principles of free, fair, and global - free in that transactions are governed only by market principles, fair in that markets are transparent and trustworthy, and global in that the markets are truly international in scope and thinking.
Creating a Society in which People are Glad to Live so Long
Creating a society in which children can be born and grow up in good health and old people can enjoy their old age without fear of catastrophic illness - a society in which everyone can be glad to live a long life - is a very basic item on the political agenda. Now that we have finally been able to extend the Japanese life span, the possibility that you or your spouse may need extended care is one of the main anxieties of old age. Nearly half of our old people are living alone or just with an elderly spouse. And the need for extended care, when it arises, also places a major burden on their families. Given this, there is an urgent need to create a system whereby the whole of society can support the necessary care. Taking maximum advantage of private-sector capabilities, the nursing care insurance system that I am proposing is one which provides integrated health, medical, and welfare services, enables the person needing care to select from a wide range of options including at-home care, and is intended to facilitate independent living, and I will submit the relevant legislation to this Session of the Diet. The enactment of this nursing care insurance system is also an opportunity to conduct an across-the-board review of our medical care, pension, and welfare system and to create a social security system suited to the 21st century. Today, each senior citizen is supported by nearly five working-age people, but 20 years from now, in 2015, this figure will be halved to about 2.5. Engaging in wide-ranging public dialogue on what entitlement levels are appropriate and what burden levels are necessary, we will work to expand consumer choice, as by involving the private sector more, and to provide quality services efficiently. Facing up to the reality of the medical insurance system, which is falling into structural deficit, we will work for comprehensive, step-by-step reform of the entire medical care structure and medical insurance provisions so that people can have assured access to the health care they need in the 21st century, and I intend to submit legislation to amend the healt h insurance system to the next Ordinary Session of the Diet.
Children have great potential for the future, and we have a responsibility for creating a climate in which they can grow up soundly. I am most concerned that the young people suffer the scars of bullying and delinquency. Home, school, and community must all work together to ensure that our children have a love of fairness and justice, care for other people and have the courage to stand up for their weaker brothers and sisters, and love their home towns and homeland. Hoping to raise people who will not only work to make their own dreams and ambitions come true but will also take an active part in shaping the futures of Japan in full awareness that we are part of the global community, I want to promote education that does not just cram facts into people's heads but also enables them to enjoy life to the fullest. I also recognize that the Japanese educational system, with its emphasis on equality and standardization, has failed to adequately encourage individuality and creativity. I will thus make an active effort to create a new educational system needed to produce people who have the warm and vital personalities needed in this era of globalization. At the same time, I will create a climate conducive to raising children happily, including an employment environment supportive of both work and child-raising.
The underlying principle of democracy is that each and every citizen should respect each other, should take part in the broad spectrum of society, and should join together in supporting the society. Thus it is that I will work to draw up a new national action plan by the end of the year to create a co-participatory society in which men and women alike can support each other and can share in all of the joys and responsibilities of life. Likewise, just as I will work for the protection of human rights so as to rid society of discrimination and to ensure that human rights are fully respected, so will I submit legislation to this Session of the Diet for public education to eradicate prejudice and to provide redress for discrimination's victims.
Along with these issues, it is also important that we make Japan a country in which people can feel affluent and can live in peace and security. Considering the over-concentration in the Tokyo area and the lessons of the Great Hanshin-Awaji Earthquake, I want to draw up a new Comprehensive National Development Plan assuming multi-polarization, to enhance disaster-relief policies, and to strengthen our crisis management capabilities, as well as to move positively ahead on the transfer of capital functions, which process is now looking at possible alternative sites. In the wake of the Great Hanshin-Awaji Earthquake, I will continue to make the utmost effort to provide housing and otherwise rebuild the residential environment, to revive the economy, and to promote safe community-building. Given the recent crime problems, I will continue to work not only to promote comprehensive anti-gun policies but also to strengthen our fight against drugs and organized crime, to make Japanese streets safe again, and to gain the trust of the people.
Budget Structural Reform to Make our Lives Better and to Meet our Responsibilities to Future Generations
It is essential that we put our budget policy on a sound footing and concentrate our expenditures on those areas that contribute to social and economic development so as to raise the standard of living and discharge our responsibilities to our children and grandchildren. In drawing up the budget for fiscal 1997, I will make every effort to take the scalpel unflinchingly to existing spending programs and to reduce government bond issues by at least ¥3 trillion as appropriate to next year's being Year One of our budget structural reforms. Just as I seek in improving our social infrastructure to concentrate on areas that directly improve the standard of living and lay the foundations for future development, so do I strive in implementing public works such as roads, water and sewage systems, ports and harbors, and agricultural community improvements to ensure that the investment is more efficient by creating cross-ministerial linkages, reducing construction costs, and making more use of cost-benefit analysis. Moreover, I will make an active effort to set medium-term targets for fiscal soundness and will consider new legislation to put our fiscal position on a sound footing. Given that budget structural reform will be a process of shared pain, politics has a responsibility to formulate and promote policies based upon broad-based public discussion.
As part of this budget structural reform, we intend to raise the consumption tax rate and to introduce the local consumption tax on schedule in April 1997 as part and parcel of the permanent reductions in income and resident taxes. In so doing, I will extend the hand of compassion to those in need.
Active Foreign Policy Efforts for World Peace and Prosperity
Many countries of the world are today promoting nation-building on the basis of democracy and economic openness. Wanting to further consolidate this trend and hence to bring peace and prosperity to the international community, I intend to engage in active foreign policy efforts with the other countries with which we share such fundamental values and ideals as freedom, democracy, and market principles. Relations with the United States are the foundation of Japan's foreign policy, and Japan-U.S. cooperation in a wide range of fields including political, economic, and other global issues is the cornerstone of peace and prosperity in the Asia-Pacific region. The Japan-U.S. security arrangements in particular are essential to Japan's security and extremely significant to the region's peace and stability, and I will continue to work for their further enhancement through the review of the Guidelines for Japan-U.S. Defense Cooperation and in other ways. It is essential to achieving the Japan-U.S. Security Treaty's objectives that we secure the stable use of U.S. facilities and areas. On the consolidation, realignment, and reduction of U.S. facilities and areas in Okinawa, where about 75% of all such facilities and areas in Japan are located, I will make the utmost efforts to successfully complete the work of the Special Action Committee on Okinawa (SACO) and to ensure that the me asures agreed upon are implemented, including the return of Futenma Air Station. I will also continue to consult with the United States on this issue as one of our top-priority issues. Likewise, working with the Okinawa Prefectural Government, my entire Cabinet will seriously study and further strengthen policies for Okinawa so as to enable the host cities, towns, and villages and the rest of Okinawa to develop self-sustaining economies, to secure employment for their people, and to improve the Okinawan people's quality of life, and to enable the region to contribute to Japan's further growth.
Along with relations with the United States, relations with our Asian neighbors are also extremely important. As well as working to strengthen our relations of friendship and cooperation with the other Asian countries, I will also contribute actively to the ASEAN Regional Forum, APEC, and other regional arrangements to further promote the present situation with its virtuous cycle of political stability and economic development. On APEC, the recent Ministerial and Economic Leaders' Meetings in the Philippines were very successful in moving APEC from the vision phase to the action phase, each APEC economy having submitted its Individual Action Plan for free and open trade and investment. It is also significant that the APEC economies renewed their commitment to promoting economic and technical cooperation hand in hand with trade and investment liberalization and facilitation for our shared future and that we agreed to ensure that APEC activities are in line with business interests through strengthened cooperation with the business sector.
China is an important neighbor, and strengthening our relations with China based upon mutual trust is an important foreign policy goal for Japan. In my meeting with the Chinese President on November 24, we agreed that the bilateral Japan-China relationship is important not only to our two countries but also to peace and prosperity in the Asia-Pacific region and hence the entire world and that both sides should work to further develop Japan-China relations. I thus intend to do all I can so that the Japanese and Chinese people alike can heartily celebrate the 25th anniversary of the normalization of relations next year. As regards the Korean Peninsula, our policy is based upon friendly and cooperative relations with the Republic of Korea. We will further strengthen these relations and will continue to work actively for peace and stability on the Peninsula.
In our relations with Russia, along with actively promoting cooperation in a wide range of areas, I intend to work to resolve the Northern Territories issue on the basis of the Tokyo Declaration and to conclude a peace treaty and fully normalize the relationship. I very much hope the Russian government will deal seriously with this issue.
Large numbers of dignitaries from Europe and elsewhere have visited Japan this autumn. Not coincidentally, the first Asia-Europe Meeting was held this March and other steps have been taken to achieve new development in the relationships between the Asian and European countries. I intend to work to further strengthen our friendship and cooperation with the countries of Europe, Europe constituting as it does one of the three global centers.
Japan will take initiatives to contribute, through contributions to the United Nations peace-keeping operations, the implementation of official development assistance, and other means, to resolving regional conflicts, arms control and disarmament, population, development, environment, and other issues facing the international community. Given that Japan will be a non-permanent member of the Security Council starting in January, we intend to take further initiatives to enable the United Nations to play a major role in resolving these issues and will work to achieve United Nations reform as a whole in a balanced manner. With regard to the question of permanent membership on the Security Council, Japan intends to address this issue on the basis of the progress made in United Nations reform and the support of its Asian neighbors and the other members of the international community as well as the further understanding of the Japanese people. The fact that the Comprehensive Nuclear Test Ban Treaty was adopted and has been signed by Japan and many other countries is a historic step forward toward achieving the nuclear-free world Japan seeks. Together with the other countries that have signed the Treaty, Japan will work for its early entry into force, and we intend to submit the Treaty and related legislation to the Diet at an early date.
Global economic development depends heavily upon free and non-discriminatory trade and investment. This is not only a vitally important issue for Japan, lacking in natural resources as it is, but is an area in which Japan can exercise active leadership. Thus I intend to make my utmost efforts to maintain and strengthen the multilateral frameworks in this area, including contributing to the success of the first Ministerial Conference of the WTO to be held in Singapore next month.
In those areas where Japanese technology and experiences can contribute to a better world, I intend to make them readily available and to work for their use. The Initiative for a Caring World that I proposed at this year's Lyon Summit is intended to improve the well-being of mankind by establishing sustainable social security systems through sharing our knowledge and our experience. Japan will thus host the East Asian Ministerial Meeting on Caring Societies next week in Okinawa to flesh out this Initiative.
Conclusion
These, then, are my views on the issues before us.
The five reforms that I have outlined today are needed for Japan and the world's future, and politics has a responsibility to implement them. It is essential that all of us involved in politics work for transparent and democratic politics and for policy-oriented politics giving serious thought to the future. At the same time, it will be impossible to implement these reforms unless our government offices and civil service are trusted. I am thus calling once more on each and every civil servant to exercise the utmost circumspection and am calling upon all administrative offices to take recent events to heart and to make sure that they are not infected by traditions and an atmosphere fostering or seeming to condone improper conduct. We cannot simply ask for the people's trust and respect. We have to earn it.
The more difficult the problems before us, the more important it is that we frankly explain the issues to the people, work with the people to devise solutions, and then resolutely implement these solutions. Radical reform will inevitably encounter resistance. There may be times when things that were accepted as matters of course under long-standing frameworks and arrangements are called into question and subject to sweeping reform. Yet I hope that we can overcome this inertia, can responsibly implement the necessary reforms, and can bequeath future generations a better Japan.
In this, I ask for the support and cooperation of all of the people and their representatives.