[Title] Policy Speech by Prime Minister Shinzo Abe to the 190th Session of the Diet

1. Introduction

(A Diet that takes on challenges towards the future)

Open Japan to the world, or pursue exclusionism?

The Japan of 150 years ago was unable to make a decision on even that policy, with never-ending discussions, ambiguous conclusions, and evasion of responsibility. Witnessing the dying Tokugawa shogunate, Oguri Kozukenosuke lamented, "A single sentence can bring ruin to a country. The sentence, ‘This will all work out somehow' is one such sentence. The downfall of the shogunate comes down to this one sentence."

We Diet members, who have received the trust of the people, must never say, ‘This will all work out somehow.' Instead, it must be, ‘We will work this out somehow,' with our own hands. We have the great responsibility of looking squarely at reality, putting forth a solution, and then executing that solution.

Economic growth, an aging society with a falling birthrate, and an increasingly severe security environment. What this Diet is being called on to do is to take on the challenges of such pending issues head on. We are called on to provide answers.

An attitude of spending all one's time simply criticizing, without putting forward any counterproposals, and expecting that everything will ‘all work out somehow' is truly irresponsible towards the public. Instead, shall we not pit concrete policies against each other and hold constructive discussions?

We, the coalition of the Liberal Democratic Party and Komeito, will never run from such matters. Under a stable political foundation, and upon our major achievements of the past three years, we will resolutely take on challenges, no matter how difficult the issue might be.

(Taking on the challenge of the global economy's new growth track)

The global economy is becoming increasingly unpredictable. Weakness has appeared in the emerging economies that have until now vigorously driven growth.

It has been 15 years since we crossed the threshold of the 21st century. Amidst demands for an inexpensive labor force, lax environmental regulations, and locations where production can take place ever more cheaply, investment into emerging economies expanded. Industrialization brought prosperity to people and created enormous markets in emerging economies.

However, as economies grow, labor costs rise. Pollution occurs. Deflation-oriented economic growth that pursues the "ever cheaper" has its own limitations.

Before that risk becomes evident, we must create a new growth trajectory for the world to take aim at.

Through innovation, we generate new added value while ensuring sustained growth. We must transition away from "ever cheaper" towards innovation-oriented economic growth that takes on the challenge of making things "ever better."

Cheap products made inappropriately, such as through counterfeits, labor exploitation, or causing environmental damage should be cleared away from the world market.

The TPP Agreement is the first step of a great challenge to disseminate economic rules suitable for the 21st century throughout the world.

We will change to become a society that produces innovations one after the other. The key to this is diversity. A Japanese proverb says, "three people coming together have immense wisdom." It is from the midst of diversity that new ideas are born and innovations arise. Our "dynamic engagement of all citizens" is an attempt to create that kind of new socioeconomic system.

Japan's agricultural products are tasty, safe, and cultivated through coexistence with nature. The quality of products "made in Japan" has been achieved through harmony with the environment while pursuing the greatest degree of energy conservation possible. Japan has from ancient times manufactured products having a high degree of added value. We will spread that spirit around the world. This requires Japan's leadership.

A major stage for this will be the G7 Summit to be held in May in Ise-Shima, where we can feel Japan's venerable traditions and culture as well as its abundant natural beauty, including Ise Jingu shrine and the area's beautiful inlets. Together with other major advanced economies sharing fundamental values, we will discuss the future of the global economy and begin taking on new challenges. I am determined to make it that kind of Summit.

2. Taking on challenges to vitalize local regions

(The TPP Agreement as a tremendous opportunity)

The enormous economic sphere of the TPP has a population of 800 million and a GDP of more than 3 quadrillion yen. The birth of the TPP will boost Japan's GDP by 14 trillion yen and generate new employment for some 800 thousand people.

At the same time, large numbers of farmers harbor unease, fearing they will be unable to keep on farming as a result of the TPP.

Japan has beautiful rural scenes, hometowns steeped in traditions, and farming village culture in which everyone helps each other. We will properly maintain these national characteristics, of which Japan is proud. The Abe Cabinet will absolutely not waver in its determination to do so.

We have secured exemptions from eliminating tariffs on the sensitive items of rice, wheat and barley, sugar and starch crops, beef and pork, and dairy products, which have long been the mainstay of agriculture in Japan. Through tenacious negotiations spanning two and a half years, we succeeded in obtaining the best outcome that realizes our national interests. Furthermore, we will take all possible measures to reinforce the condition of Japan's agriculture and stabilize agricultural management so that producers can continue production with peace of mind.

Raw milk cultivated on the magnificent land of Tokachi in Hokkaido is now processed into soft-serve ice cream raw materials and exported, with figures climbing dramatically.

Three years ago when I set forth the target of increasing the value of agriculture, forestry, and fishery product exports to one trillion yen by 2020, some claimed it would be impossible. Others said it could not be done.

However, last year the value of these exports reached 700 billion yen. The result was that we broke the record for highest export value three years in a row.

We will achieve the one trillion yen mark before the original target date of 2020. For Japan's agricultural products, which are both tasty and safe, the TPP is not a crisis. Instead, it is a tremendous opportunity to market those products to the world.

The time and effort of the farmers who wake up early to pull weeds, their faces dripping with sweat, devoting their heart and soul to growing crops, will come to be properly appreciated. That is the TPP Agreement.

Transparent and fair rules, such as geographical indications of agricultural products, will be shared across a wide range of fields, including investments, labor, and the environment. Japan and the United States will lead the way in disseminating to the world economic rules under which good quality items are evaluated as such. The TPP is truly a grand plan for the long-term future of our nation.

Looking beyond that, we will, in order to further enlarge free and fair economic zones, accelerate such negotiations as the Japan-EU Economic Partnership Agreement (EPA) as well as the Regional Comprehensive Economic Partnership (RCEP) that includes India and China. We will boldly push forward economic integration and take advantages of overseas vitality for Japan's growth.

(A new era in agricultural policy)

Taking this opportunity, we will further enhance the value added to agriculture, forestry, and fishery products and accelerate our efforts to double the income of farmers and farming communities.

We will support the branding of our agricultural products, such as Yubari melons, Aomori black currants, and Kobe beef. We will enhance our assistance towards taking on the challenges of transitioning to "senary," or sixth-order, industry [in which agricultural, forestry, or fishery operations create new added value by integrating production, processing, and sales and promoting the use of local resources], including the development of new processed goods.

We will accelerate farmland consolidation into the hands of motivated people who will shoulder responsibility for it. In addition to halving the property taxes on farmland that is lent to farmland consolidation banks, we will reinforce the taxes assessed on farmland not being cultivated. We will strengthen our international competitiveness by pushing forward with the transition to large-scale operations and large-scale sectioning.

Under "agricultural policy on the offensive," the number of people in their 40's or younger newly employed in agriculture surpassed 20,000 for the year, the highest number these past eight years.

"It's a tough job but extremely rewarding."

Those are the words of a young worker in the forestry industry whom I met in Wakayama Prefecture. He had moved there with his family 11 years before to work in a project designed to bring young people into the forestry industry, even though they were not originally from the area. In this way he had become one of the human resources supporting the area's forestry industry.

We will carry out reforms to make agriculture into something in which young people can have hopes and dreams for the future. Let us work together to create a new era in agricultural policy, shall we not?

(Overseas expansion by small- and medium-sized enterprises and micro enterprises and by middle-sized firms)

The TPP Agreement will completely eliminate unreasonable demands that force technology transfers. Intellectual property will also be protected. For small- and medium-sized enterprises (SMEs) and micro enterprises and middle-sized firms in every corner of Japan with high technological capabilities, the TPP Agreement is a great opportunity.

We are now also in an era in which SMEs and micro enterprises and middle-sized firms are called on to manage their companies with a global perspective.

We will enact a "Competitiveness Enhancement Act" for SMEs. We will support the development of human resources for business operations that have in their view the possibility of expanding overseas, and human resources for sophisticated business administration. As for capital investment to enhance productivity, we will carry out bold tax reductions, cutting property taxes in half for three years. We will build a system that provides support consistently, from the planning stage to developing a market and business negotiations. The system will be centered on JETRO, which enjoys a worldwide network.

(Reconstruction of the disaster areas)

From Iwate to the world. Miracle soy sauce that overcame the earthquake disaster began to be exported to France last year.

The tradition of Kesennuma in Miyagi Prefecture of knitting fishing nets was reborn as hand-knit sweaters made by women in the local community. At Tsuchiyu Onsen in Fukushima, they are trying to restore the turnout they used to enjoy by making use of geothermal energy and developing new products and a tour in which people can experience various things for themselves.

"New buds" of industries are sprouting from Tohoku, one after the other. I have visited the affected area 25 times already, and each time I visit, I feel the enthusiasm of the local people towards reconstruction.

By the spring of 2017, we will have completed 25,000 residences of the public housing for evacuees, equivalent to 85 per cent of the planned number, and the transfer of housing to areas of high elevation is also expected to be roughly 70 per cent complete by then.

This spring, almost all fishing ports will have been restored. Next year, we will aim at the reopening of all marine product processing facilities. Eighty per cent of farmland is scheduled to be ready for planting. The recovery of occupations and livelihoods is also fully underway and this recovery will enter a new stage.

We will provide assistance that leads to the self-reliance of the disaster areas, setting the next five years as a period for reconstruction and vitalization and securing 6.5 trillion yen in financial resources.

In Fukushima, by the spring of 2017 we will lift the evacuation orders except for zones where the return of residents would be difficult. We will also move forward steadily in decommissioning and in measures to tackle the issue of contaminated water, accelerate further the construction of interim storage facilities and decontamination, and do everything in our power to restore infrastructure for daily life, so that as many people as possible return to their hometowns.

"I can now see bright sunlight."

In the town of Okuma, plans for a reconstruction hub are now underway. The plans include the construction of a factory for growing vegetables indoors year round and a "mega solar" power plant. Reconstruction cannot be merely restoration. This is an opportunity to create something new and to take on the challenge of identifying and exploiting new potential.

This is truly pioneering the vitalization of local regions.

We will continue to do our utmost to support the feelings towards their hometowns and the enthusiasm towards reconstruction felt by the residents of the disaster areas.

(Local regions' originality and ingenuity)

The driving force behind the vitalization of local regions is the passion of the people living there.

By March this year, almost every local authority will have formulated a comprehensive strategy for the vitalization of each local area. They will carve out their own futures using their own originality and ingenuity. We will use "grants for vitalizing local regions," which have a high degree of flexibility, to support the local areas' enthusiastic endeavors.

We will press forward with decentralization reforms for the regions through the initiative of the regions themselves. We will make it possible for local authorities to establish local versions of "Hello Work" (the public employment bureau) and introduce work opportunities in a format that unifies consultation services for residents and support for businesses.

Through Abenomics, local tax revenue for fiscal 2016 increased by more than 5 trillion yen compared to before the change of government, reaching an all-time high.

We will make the fruits of this reach every corner of the nation. When the consumption tax rate rises, by expanding the local corporation tax and redistributing tax revenues that tend to be apportioned too heavily to cities, we will properly secure financial resources even in areas facing depopulation.

We will launch a corporate version of the "hometown tax" system. We will move forward dynamically in vitalizing local regions by utilizing the power of the private sector to a large degree.

We will reinforce our measures to counter cyber crime and cyber attacks in order to protect daily lives that are safe and provide peace of mind. We will strengthen regulations on fraudulent business practices that target the elderly and establish prompt relief measures for consumers. Regarding the issue of building foundation piling, we will lay down clear rules and prepare a system for performing appropriate construction, with a view to preventing recurrence.

As for the recent accident involving a ski tour bus, the lives of a large number of young people with futures were extinguished. I extend my heartfelt wishes for the repose of the souls of those who lost their lives as well as for the full recovery of the injured as soon as possible. We will use thoroughgoing means to determine the cause and take every possible measure to ensure that this tragedy is never repeated.

Last year we again experienced a succession of natural disasters, notably the torrential rains in the Kanto and Tohoku regions. I will move forward in making the nation's infrastructure more resilient by exhaustively undertaking measures to prevent and mitigate disasters, including by strengthening embankments, holding disaster drills, and providing accurate information on disaster prevention.

(A tourism-oriented country)

Construction of the Chuo Maglev Shinkansen has started in earnest. As a super-fast marvel that will connect Tokyo and Osaka in an hour, it is the crystallization of our most advanced technologies.

The Hokkaido Shinkansen will begin service in March, with construction up to Sapporo continuing. The Kyushu Shinkansen will also steadily become linked through to Nagasaki. And, through its extension to Tsuruga, the Hokuriku Shinkansen, which runs from Tokyo through Toyama and Kanazawa, will create a route that connects to Osaka.

With Osaka and Tokyo as major hubs, we are linking up one region with another, from the north to the south. By integrating the entire country into a single economic zone through the creation of a "corridor for vitalizing local regions," we will generate growth opportunities for the local regions.

The number of non-Japanese tourists has broken all previous records three years in a row and has now surpassed 19 million, more than doubling the figure before the change of government.

Japan's travel balance, which had a three trillion yen deficit 20 years ago, has turned a surplus for the first time in 55 years. A surplus of over one trillion yen is expected for the current fiscal year.

The next target is 30 million people, or indeed, even higher. We will press forward in the strategic relaxation of visa requirements and in regulatory reform that will expand the use of so-called "vacation rentals," whereby visitors stay in private residences. We will begin expanding the capacity of Haneda Airport while further developing the systems for customs and quarantine domestically and for immigration control.

Over the past three years, the number of large-scale cruise ships visiting the port of Ishigaki in Okinawa Prefecture has increased to almost twice the previous figure.

In the town, tourists eat Ishigaki beef and buy brown cane sugar as souvenirs. Some tourists move on to the surrounding islands, so the islands are very enlivened. We will move ahead with our development of a new quay in preparation for the start of operations two years from now. In order to make the growth potential of Okinawa, a hub in Asia, come into full bloom, we will secure a budget exceeding that of the current fiscal year.

The number of tax-free shops for tourists tripled all at once over the past year to reach 30,000 shops. We will simplify procedures still further and lower the monetary amount qualifying for tax exemption, thereby linking the intense consumption by non-Japanese tourists, amounting to more than 3 trillion yen annually, to an expansion of "hometown specialty goods" that are the pride of their local regions.

Each of Japan's local regions has certain features unique to only itself, such as abundant natural beauty, culture or history, or cuisine. By converting those features into added value, the negative trend towards depopulation can be largely transformed into something positive. Let us work together to vitalize our local regions.

3. Taking on the challenge of realizing the dynamic engagement of all citizens

(Reforms to bring about diverse work arrangements)

The challenge to reach Venus. That was a challenge in which the space probe Akatsuki failed five years ago.

However, people did not get discouraged. Last month, Akatsuki succeeded in its second attempt. It was a female researcher who spent two and a half years deriving the probe's transfer orbit from tens of thousands of tenaciously-made calculations.

"I would like to thank my family," said that researcher, Ms. Chikako Hirose, who during those five years experienced marriage and childbirth. After taking childcare leave, she returned to the project once more to be present at the moment of success.

We will build a society in which all people can play active roles, including both women and men, the elderly and youth, people who have experienced failure, people with disabilities and people fighting intractable illnesses. From that diversity, surely new ideas will emerge while innovation streams forth.

We will begin to take on the challenge of realizing the dynamic engagement of all citizens.

The most important issues are transitioning to a society in which diverse work arrangements are possible, tailored to the circumstances of each individual, and ensuring a work-life balance.

We must dramatically reform the existing work system with its uniform working hours, along with our social mindset. We will expand flextime systems. For highly specialized jobs, we will enable people to opt for a new work system in which evaluations are based not on the number of hours worked but on output achieved.

Long working hours will be kept under control by raising overtime pay, among other measures. Furthermore, we will prevent overworking through the creation of schemes that ensure that employees are able to utilize their annual paid leave.

We will accelerate the creation of a society in which women are able to be dynamically engaged. We will mandate that business operators institute measures to prevent so-called "maternity harassment," or harassment from superiors or coworkers for reasons such as pregnancy, childbirth, or childcare leave. We will also establish new subsidies for business operators that actively urge men to take childcare leave.

We will revise the Act for Providing Comprehensive Support for Persons with Disabilities and carry out well-tailored assistance so that people with disabilities can lead independent lives, establish roots at their workplaces, and continue their employment.

We will work to ensure that people with non-permanent employees receive equal treatment [with permanent workers]. We will expand the application of employees' health insurance to part-time workers. We will expand subsidies for advancing workers' careers to business operators that make progress in moving non-permanent employees to permanent positions or that improve their treatment of such workers. We will make it possible also for contract employees who have been working more than one year, as a rule, to take childcare leave and nursing care leave. Furthermore, within the "Plan to Realize the Dynamic Engagement of All Citizens," which will be compiled this year, we intend to touch upon how to bring about equal pay for equal work.

(Eliminating cases in which people have no choice but to leave their jobs to provide nursing care)

I aim to create a society in which a person can provide nursing care without feeling that their own life is being sacrificed to do so. I have been truly struck by the words of people who experienced providing nursing care for family members who appealed for that very thing.

More than 100 thousand people leave their jobs each year to provide nursing care. There are some cases in which the elderly person receiving the care and the working generation caregiver end up going down together when the caregiver leaves his or her job. If Japan's breadwinners, the second baby boomer generation, were to leave their jobs in large numbers, our economy and society would cease to be viable.

Having set forth the clear target of eliminating the need to quit one's job to provide nursing care, we will push forward in reforms to make the social security system into one that also ensures the working generation's peace of mind.

We will reduce the burden of in-home nursing care. We will prepare a diverse range of nursing care arrangements for 500 thousand people by the early years of the 2020's, including special nursing care homes for the elderly and housing for the elderly that also provides services. We will offer to enable nursing care facilities to utilize state-owned land in the Tokyo metropolitan area and elsewhere at a low cost.

For university students who intend to become nursing care workers, we will enhance the scholarship system under which they are exempted from having to repay the scholarship amount. We will provide a reserve fund for reemployment in cases in which a person who has left his or her job for a time returns to his or her position. We will fully mobilize all manner of policies and measures to ensure that there are 250 thousand nursing care workers in the future.

We will make it possible to take only a portion of one's nursing care leave at a time and retain the remainder for future use and raise the benefits during leave from 40% to 67%. We will create a society in which people can make nursing care compatible with their jobs, including by allowing exemptions from overtime work and by allowing shorter working hours.

Close to 70 per cent of elderly people are hoping to work even beyond the age of 65. That number is highly encouraging.

We will make elderly workers included in the scope of employment insurance and provide various types of employment opportunities, including support for re-entering the labor force. Moreover, in our "Plan to Realize the Dynamic Engagement of All Citizens," we lay out a path for elderly people who wish to work by preparing an environment for raising the retirement age, such as assistance for proactive companies that extend their retirement age.

I would like for people to keep on demonstrating their wealth of experience and knowledge in our society in an energetic way, to the greatest extent possible. Mere slogans will no longer do. Let us make "a society in which people can be active their entire lives" something fully tangible.

(A birth rate of 1.8 children per woman, as desired by the public)

The issue that is most fundamental in bringing about the dynamic engagement of all citizens is facing up to the challenge of a declining population. This means maintaining a population of 100 million people even 50 years from now. We will begin to tackle this issue that has been shirked for a great many years.

We will aim to bring about a birth rate of 1.8 children per woman, the rate desired by the public.

I would like to help to fulfill the wishes for marriage and childbirth of as many young people as possible.

For young people whose incomes are low, we will provide economic assistance for their newly married lives. We will expand assistance for fertility treatment. We will exempt people from paying pension premiums in the period surrounding childbirth and reduce the financial burden of childbirth. We will also increase the number of Comprehensive Support Centers for Families with Small Children around the nation to provide consultation on various areas of worry, from pregnancy through childbirth and childrearing.

We must make this a society in which it is possible to raise children while being employed.

We will reinforce the assistance we provide for children and child-raising, including by expanding childcare for children who are sick. We will build upon our targets to secure childcare arrangements for 500 thousand children in total by the end of fiscal 2017. We will secure 90 thousand nursery school teachers by expanding the number of scholarships that do not have to be repaid and providing assistance that includes reserve funds for re-entering the workforce. We will absolutely succeed in eliminating childcare waiting lists.

We will encourage mutual support within extended families. We will provide assistance for the construction of two-generation housing. We will expand the "neighbors discount" for Urban Renaissance (UR) rented accommodation from 5 per cent to 20 per cent. We will formulate a New Basic Plan on Housing and make fully-fledged efforts to provide assistance for three generations living together or living near each other.

We must not allow children's futures to be affected by their families' economic circumstances.

We will expand our assistance to single-parent families. We will double the additional childcare allowance for low-income households and provide 10,000 yen per month for the second child and 6,000 yen per month for subsequent children. We are moving forward step by step in making nursery education free of charge. As part of such efforts, for low-income households, the second child will be charged half the normal rate and subsequent children will attend without charge, regardless of the ages of the siblings.

We will expand scholarship benefits for high school students. Beginning with students intending to enter university who make use of the system this year, we will launch a new scholarship system in which the amount to be repaid varies with the person's level of income after graduation. We will prepare an environment in which anyone who wishes to do so can advance to high school, vocational school, or university.

We will prepare an environment in which children who refuse to go to school because of various circumstances such as bullying or developmental disorders can also have confidence in themselves as they learn. We will for the first time take steps towards providing assistance to children attending free schools. We will move forward in a rebuilding of education that values each child's individuality.

Children are Japan's future. Let us all work together to build a society in which all children are able to dream big dreams if they work hard, shall we not?

(The fruits of Abenomics)

Three years of Abenomics have borne great fruit.

Nominal GDP has increased by 28 trillion yen. Gross national income has increased by almost 40 trillion yen, and there are prospects that this year we will recapture the "50 trillion yen in lost gross national income," as I pledged to the public during the election that resulted in a change in government.

Tax revenue within the budget for fiscal 2016 has increased by 15 trillion yen. We are controlling growth in expenditures, notably in social security, and the deficit in our primary balance has decreased to a bit more than 10 trillion yen, less than half its level before the change in government.

Without economic revival, there can be no fiscal reconstruction. We will maintain the target of achieving fiscal soundness by fiscal 2020. We are also continually pushing forward with administrative reform. When raising the consumption tax rate in April 2017, the tax rate for all food items other than alcoholic beverages and food served at restaurants will be a lower tax level of 8 per cent, rather than raised to 10 per cent. We are moving forward with preparations so that a wide range of consumers can feel the reduced tax burden within their daily lives.

Corporate earnings have reached their highest level in history. Bankruptcies of SMEs are down 20 per cent compared with the figures before the change of government, and two years ago, the number of bankruptcies fell below 10,000 for the first time in 24 years. Last year, that number dropped almost 10 per cent further.

Employment has increased by more than 1.1 million people and the number of regular employees switched to an upward trend. Regarding regular employees, the ratio of job offers to job seekers increased by 50 per cent compared to before the change of government to reach the highest level ever since these statistics were first collected. Last year we also achieved the highest increase in wages in 17 years.

(A 600 trillion yen GDP)

Without a strong economy and the fruits of growth, those fruits cannot continue to be distributed. We will create a "virtuous circle of growth and distribution."

In order to strike the two targets of eliminating the need to leave one's job to provide nursing care and of raising the birthrate to 1.8 children per woman, the level the public has indicated as desirable, and atop the stable foundation made through these two policies, I have set forth one more target of achieving a 600 trillion yen GDP, Japan's largest in the post-war era, and I will fire off my new "three arrows" accordingly.

This spring as well, we will link the expansion in corporate earnings to higher wages. The government and the business community share a common understanding of aiming at an increase in wages that will surpass the raise achieved last year. We will also raise the minimum wage, aiming at an annual rate of increase of 3 per cent and working toward 1,000 yen per hour. At the same time, the government and the private sector will make efforts to improve subcontractors' transaction terms, such as passing along the costs of raw materials within pricing.

Last July, August, and September, capital investment by companies had expanded by more than 11 per cent year-on-year. Three years from now, we will be able to build upon that by a further 10 trillion yen. That is the understanding that the business community and I came to share.

We will decrease, in one stroke, the effective corporate tax rate into the twenties from the new fiscal year, and carry out reforms to the corporate tax, bringing it to a level that compares favorably in the international context. For SMEs and micro enterprises, we will carry out bold reductions in property taxes, increase return on investment, and support domestic capital investment.

We will boost domestic demand through an economic virtuous circle.

Japan will continue to achieve robust growth. The success or failure of this depends on innovation.

Japan's Shinkansen has transported some 5.6 billion passengers over 50 years, with zero fatal accidents, and 120 thousand runs annually with departures on time to within a minute. Shinkansen technologies are innovations that are the pride of Japan. Our administration's top-level sales efforts to expand our markets overseas have borne fruit and the decision has been taken to adopt Japan's Shinkansen technology in India. In energy and urban development, Japan offers high-quality infrastructure. We will establish new accounts at the Japan Bank for International Cooperation (JBIC) and work to expand our markets throughout the world.

Countermeasures to global warming provide opportunities for creating new innovations. We welcome the Paris Agreement, which is applicable to all countries including major emitters. Under our target of a 26 per cent reduction in greenhouse gas emissions by fiscal 2030 compared to fiscal 2013 levels, we will move forward in bold technological innovations in energy conservation and renewable energies, while also introducing these to the greatest possible extent. Over the next 15 years, we will raise sales of next-generation automobiles to 70 per cent of all new car sales, thereby dramatically changing the shape of the automobile market.

We will support research that takes on challenges by carving out the next generation in artificial intelligence, robots, the Internet of Things (IoT), space, and other such fields. We will also bring new potential into bloom through bold regulatory reforms. We will move further along in investigating and developing methane hydrate, a domestically produced resource, aiming at its commercialization.

People suffering from an intractable illness in which muscles become weaker will be able to walk using their own legs. "Dream robot suit" technology has been born at the University of Tsukuba. The university succeeded in developing the product through private sector cooperation. Thanks to partnerships with overseas corporations as well, the suit has become a product expanding its market into Europe.

Dynamic innovation will emerge from open cooperation among research institutions, universities, and corporations, both domestic and international. We will tear down all manner of walls. The overriding theme within the new Basic Plan on Science and Technology is open innovation. At research institutions, we will bring together the very highest-level researchers from around the world. At universities, we will bring together top-notch human resources from both within Japan and abroad, and carry out innovative administrative reforms while promoting assertive management that advances proactive university-industry cooperation and other such endeavors.

I am determined to make Japan "the most innovation-friendly country in the world."

4. Taking on challenges to make a better world

(Diplomacy that takes a panoramic perspective of the world map)

Over these past three years, I have visited 63 countries and regions and held more than 400 summit meetings.

Taking a panoramic perspective of the world map, I will carry out proactive diplomacy for peace and economic prosperity. In addition, I will firmly ensure the peace and prosperity of this region, extending from Asia into the Pacific region. It is Japan that is the driving force, and we must fulfill such great responsibility.

I firmly believe that such is the path that will preserve the peace and create further prosperity of our own nation.

I will further deepen our cooperation with countries with which we share such fundamental values as freedom, democracy, basic human rights, and the rule of law.

With ASEAN, Australia, India, and Europe, I have thus far deepened the bonds of friendship we share with them as strategic partners. I will further expand, deepen, and strengthen our cooperative relations with them.

With the Republic of Korea, at the end of 2015 we confirmed that the issue of comfort women is resolved finally and irreversibly, which put a definitive end to this long-standing issue. The ROK is our most important neighbor that shares strategic interests. As such, we will build the cooperative relations of a new era, thereby ensuring peace and prosperity in East Asia.

The peaceful rise of China offers a great opportunity for Japan as well as for the international community. Under the principle of a "Mutually Beneficial Relationship Based on Common Strategic Interests," we will further strengthen the trend of improving relations. We will meet the expectation of the international community by steadily and from a broad perspective developing friendly relations between Japan and China, both of which bear great responsibility for the peace and prosperity of the region.

With Russia, we wish to forge a relationship in which we together tackle various issues the world confronts. We will address the situation in Ukraine attaching importance to the solidarity of the G7. We will press forward in strengthening our relations step by step across a broad range of fields including the economy, energy, and culture, towards the resolution of the territorial issue and the conclusion of a peace treaty.　We will seek all possible opportunities to continue our dialogues.

(An alliance of hope)

The linchpin for conducting this diplomacy is the Japan-U.S. Alliance.

The Japan-U.S. Alliance, bonded by universal values and formed by the world's largest and third-largest economic powers, is an "alliance of hope" in which we act together for world peace and prosperity.

We will work with the United States to take on all manner of human security-related issues, including poverty, infectious diseases, and climate change.

Under this robust relationship of trust, we will make our utmost efforts to mitigate the impact of U.S. Forces facilities and areas on Okinawa while maintaining deterrence.

The return of the West Futenma Housing Area was realized last year, and a decision has been made to build a hospital there. Japan and the U.S. have also agreed on the installation of an access road and we continue to move forward with the project. The periodic maintenance of Osprey will be carried out at JSDF Kisarazu camp in Chiba. A decision has also been made on the early return of partial lands of Marine Corps Air Station (MCAS) Futenma and Makiminato Service Area (Camp Kinser). We continue to mitigate the impact on Okinawa step by step with tangible results.

Twenty years have passed since Japan and the U.S. reached an agreement on the total return of MCAS Futenma, which is located at the very heart of the city and surrounded by schools and residences. Postponements cannot be tolerated any longer. The landfill size for the relocation to off the coast of Henoko-saki in Nago city will be one-third of the current size of MCAS Futenma. Of the three functions performed by MCAS Futenma, two will be relocated to the mainland, with the new location limited solely to the operative function of Osprey. The daily flight paths will also be rerouted to over the ocean, reducing to zero the number of residences that will require noise reduction measures.

I will work with the people of Okinawa to carve out the future of Okinawa while continuing to make efforts and gain their understanding through continued dialogue.

(Proactive Contribution to Peace)

The tremendous earthquake that struck Nepal resulted in more than 25,000 casualties. The Self-Defense Forces (SDF) were immediately deployed to the affected area, where they worked round the clock providing medical assistance.

When the SDF came to withdraw, a mother leading her child by the hand came up to the SDF personnel and gave them some candy as a gift. In that affected area suffering from food shortages, that candy was brimming with her heartfelt thanks.

This woman, who had lost her husband and her home in the earthquake, clutched the hands of the SDF personnel, saying, "Thank you. Thank you." over and over again.

The world acclaims, thanks, and, indeed, relies on the SDF, whose personnel work hard and resolutely for the sake of the international community.

The SDF will make further contributions to the peace of the international community under the banner of "Proactive Contribution to Peace." The Legislation for Peace and Security has received support and high evaluations from the international community. This proves that criticisms of the bill as a "War Bill" was simply labeling with no basis.

It is totally unacceptable that North Korea conducted a nuclear test recently. Japan strongly condemns it. It is a clear violation of UN Security Council resolutions, and we will coordinate with the international community in taking firm measures. Under the principles of "dialogue and pressure" and "action for action", Japan makes its utmost efforts to achieve the resolution of the abductions issue. We strongly urge North Korea to take concrete actions towards the comprehensive resolution of the outstanding issues of concern, including the abductions, nuclear and missile issues.

This is an era when no single country can protect its security on its own. We will enhance the deterrence by enabling seamless responses, including permitting the exercise of the right of collective self-defense to a limited extent in order to defend Japan. We will move forward in making all necessary preparations for putting the Legislation for Peace and Security into effect.

(A Japan that shines at the center of the global stage)

From this year, Japan takes on the weighty responsibility as a non-permanent member of the United Nations Security Council. Pushing forward with the reform of the United Nations, we will firmly fulfill our responsibilities towards world peace and stability.

This year, we will invite world leaders to the Ise-Shima Summit. TICAD will be held bringing together the leaders of African countries. Moreover, the World Assembly for Women (WAW!), which aims to bring about "a world where women shine," will be held for the third year. And, Japan will take the chairmanship of the Japan-China-ROK Trilateral Summit Meeting.

Japan will convey the attractiveness of its world-class art and culture. We will proactively engage in cultural diplomacy by making use of our ‘soft power.'

The efforts that the Government of Japan has made until now have come to bear fruit, with the resolution to establish "World Tsunami Awareness Day" adopted by consensus at the United Nations. We will utilize lessons from Japan in disaster risk reduction and mitigation around the world.

Tensions have been rising in the Middle East region. We will call on all the parties concerned to practice self-restraint and to promote dialogue.

A large number of refugees are flowing into Europe. Working towards the fundamental resolution of the issues, we will fulfill our significant responsibilities by providing cooperation in health services and furthering our economic assistance.

We will continue to carry out the fight against terrorism together with the international community. We will reinforce our domestic counterterrorism measures by strengthening border security, as well as crisis management, and take all possible measures to ensure security.

5. Conclusion

Japan's national rugby team took on a challenge towards the world. Their historic victory imparted tremendous self-confidence to the Japanese people and encouraged us greatly. We will do our utmost to lead to the success of the Rugby World Cup and the Tokyo Olympic and Paralympic Games to be held in Japan.

Continuance is strength. We will continue to head straight down this path without wavering, based on the achievements we have made in both our domestic and foreign affairs these three years. We will produce results by taking on challenges of even difficult issues head on.

Taking on challenges.

Juji Ishii, who founded Japan's very first home for orphaned children, devoted himself to taking on child welfare challenges. He raised a great many children splendidly and sent them out into society.

He rescued any orphan he encountered. The number of children increased with every natural disaster. He experienced great hardship any number of times when food became scarce. There was an outbreak of cholera and he himself came to hover between life and death.

And yet, he never gave up, no matter what difficulties he faced. He continued to take on child welfare challenges, grounded in his strong convictions.

"Make it happen. Don't give up. It will certainly take shape if you persevere."

The Abe Cabinet will never give up. We will press forward toward our goals, never abandoning them.

We will carve out a future in which all citizens are dynamically engaged. We will map out a trajectory for sustained growth for both Japan and the globe. We will create a better world that enjoys peace and stability. The Abe Cabinet will keep taking on challenges going forward.

Honorable members of the Diet, let us together take on challenges. And, let us also produce results. That is the mission we Diet members are charged with.

We cannot carry out our responsibilities to the Japanese people by simply raising opposition or shelving policy differences.

How shall we steer the economy? And how shall we secure the lives and the peaceful daily lives of the Japanese people? Let us all make our policies clear and then hold constructive debates, shall we not?

Issues include the reform of the electoral system, which is the arena for exercising democracy, and constitutional revision, which will determine the form the country takes. We Diet members who have been entrusted by the public with responsibilities should hold discussions squarely and openly to produce solutions, never evading the issues before us. Let us go forward carrying out those responsibilities.

Thank you very much for listening.