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Executives' Comments  Press Conferences Chairman Sakakibara's Statements and Comments
at His Press Conference

February 8, 2016

Appointment of new vice chairs

At a meeting of the chairman and vice chairs today, we informally decided on candidates for new vice chairs to be selected. We will propose and authorize their appointment at an annual General Assembly meeting of Keidanren on June 2 after endorsing it at a Board of Directors meeting on May 9. Effective with the General Assembly meeting, two of the current 14 vice chairs, Hitoshi Ogita and Kunio Ishihara, will retire after completing their term, and four new vice chairmen, including successors to the retiring officials, are scheduled to assume the posts. The new chairs will be Tokyo Gas Co. Chairman Tsuyoshi Okamoto, Mitsubishi Corp. President Ken Kobayashi, Isetan Mitsukoshi Holdings Ltd. Chairman Kunio Ishizuka and Sumitomo Mitsui Banking Corp. President Takeshi Kunibe. On June 2 and thereafter, we will push ahead with Keidanren activities under a new leadership of the chairman and 16 vice chairs.

It will be the first time for Keidanren to have vice chairs from Tokyo Gas and Isetan Mitsukoshi Holdings. Tokyo Gas is promoting operations not just in the gas supply business in the region but also in electric power and other energy-related fields. The company is involved in global business activities such as response to demand for infrastructure abroad and procurement of energy resources from overseas. We hope the company will help strengthen the dissemination of information in these fields. As for Isetan Mitsukoshi Holdings, expansion of consumer spending and, as part of it, expansion of inbound tourism are important themes. We are pinning high hopes on the company for its strong capability of sending out information in this segment. Mitsubishi Corp. and Sumitomo Mitsui Banking have so far produced vice chairs. At present, it is only from Mitsui & Co. among trading firms to have a vice chair. By having two vice chairs from the trading industry, we are seeking to enhance our activities in this field. Similarly, we will have two vice chairs from the banking industry. The year 2016 is a crucial period for Japan’s exit from deflation and economic rebirth. We will further strengthen the structure of Keidanren and invigorate its activities by having in place the strongest leadership lineup from various viewpoints.

Negative interest rate

We understand the negative interest rate policy adopted by the Bank of Japan is a measure necessary to eliminate the deflational mindset of businesses and people. In fact, it will have the effect of supporting efforts to break away from deflation. Without the negative interest rate, stock market prices may have fallen even more.

Pulling out of deflation and achieving economic rebirth are the most important challenges faced by the Japanese economy. The government, bureaucracy and private sector must mobilize every possible policy and measure to do so. On the part of the business community, we are working aggressively to boost capital investment and increase wages through proactive management. We give high marks to the Bank of Japan which we believe hammered out what it can do on the policy front in a timely manner.

Real wages

Both major companies and small and medium-sized firms implemented high-level wage increase for the past two years in a row, but the latest Monthly Labor Survey by the Ministry of Health, Labor and Welfare showed that inflation-adjusted real wages declined in 2015 for the fourth straight year. One factor behind the decline was an increase in the number of senior workers re-employed by companies having a 60-year-old age limit under a mandatory retirement system with a subsequent decrease in their wage levels. Wage levels of newly hired young employees at these companies are lower than those of retiring workers, and sometimes the total payroll will decrease as a result. Some point out that such circumstances have affected statistical data. We think it is necessary to carefully verify this sort of argument.

Equal pay for equal work

The Japanese-style wage system is put into shape by taking into account not only the description of work but also an anticipated role and responsibility of each individual as well as a mechanism of putting human resources into play, thus offering workers balanced treatment. Prime Minister Shinzo Abe has gone a step ahead to indicate that his administration will work to realize equal pay for equal work. We expect his move to support corporate efforts concerning fair and equitable treatment of employees. We understand the government will discuss details from now on under its plan to promote "dynamic engagement of all citizens." It is important to continue discussions on the matter while keeping in mind the fact that businesses are offering workers treatment that fully take into consideration the aspect of future utilization of human resources.

Correction of uneven local corporate taxation

We understand that ongoing government efforts to rectify the uneven distribution of local corporate taxation are intended to change the proportion of revenue from the local corporate tax (national tax) and revenue from the corporate inhabitant tax (local tax). Specifically, the move is designed to increase the national tax portion and realize a matching reduction in the local tax portion. The current local corporate taxation is uneven and imbalanced according to municipalities. Keidanren has been asserting that the corporate inhabitant tax should be turned into national tax and that revenue from it should be redistributed. Our position is in line with the direction of the government’s tax reform. We understand that efforts are under way to correct the uneven picture of distribution in the belief that the overall tax balance will be optimized.

Prevention of outflow of technologies to other countries

Generally speaking, it is necessary to ensure that important domestic technologies will not be allowed to easily slip out of the country. In the United States, the Exon-Florio provision restricts corporate takeovers by foreign companies from the perspective of ensuring national security. Japan also needs to have some sort of preventive measure in place to protect sensitive technologies in a proper manner. Although there are restrictions imposed by the Foreign Exchange and Foreign Trade Control Law, we think it necessary to review the scope of technologies covered and protected.

Political funds

In order to maintain democratic politics and parliamentary democracy in a proper manner, matching costs are required, and it is important for businesses to make political donations as part of their social contribution. It is an essential prerequisite for political donations to be made in a highly transparent and clean manner. Keidanren is calling on member companies to make donations to the headquarters of political parties in the cleanest and most transparent manner, and we think this should be continued.

In fundraising by political parties, what should be given top priority are party membership dues and revenue from their activities. Donations should be positioned as a funding source coming next to these two, and public subsidies should be placed as a supplementary source. It does not follow that political donations may be terminated simply because of public subsidies.

Lower house electoral reform

As the Supreme Court has ruled House of Representatives elections were "in a state of unconstitutionality," the electoral system of the lower house should be rectified as soon as possible. Given reform proposals submitted already by the Research Council on the Electoral System, an advisory panel to the speaker of the House of Representatives, we hope that the National Diet to discuss the issue in a proper manner on the basis of the proposals and map out a course of action to be taken. On the other hand, the number of parliamentary members per population is not particularly large when internationally compared, as pointed out by the council in its proposals. The number of Diet seats itself should be judged from an overall point of view.

Missile launch by North Korea

The recent missile launch by North Korea poses a great threat to the security of the international community, notably Northeast Asia, and we deem it extremely regrettable. We cannot understand such action at all when the international community had been working on North Korea to refrain from it. Prime Minister Abe has clearly expressed his administration’s intention that it will seek to tighten sanctions by the United Nations and by Japan on its own. We hope the Abe administration will send out information on the stance to the world as quickly as possible.

Geopolitical risks have already become obvious in the East Asian situation, including North Korea, and over the Spratly Islands in the South China Sea, and we think the missile launch itself will not directly affect the economic situation.

Executives' Comments