On May 15, Keidanren publicly released its proposal regarding growth strategy and fiscal reconstruction.
Based on the business community's strong sense of crisis over the neglect of the extremely harsh conditions of the Japanese economy and finances, and the postponement of reforms in these areas, this proposal calls for efforts involving prompt application of growth promotion policies established in the government's new growth strategies, and asks for decisive implementation of fiscal reconstruction through expenditure controls and tax increases.
Specific measures for such growth strategy involve the following: (1) early restoration and recovery following the Great East Japan Earthquake through utilization of the special zones for reconstruction, (2) establishing a level playing field in business environments through efforts including reductions in effective corporate tax rates to 25%, (3) realization of measures for promotion of innovations, including expansion of government research and development investments and tax programs for promoting research and development, (4) discovering domestic demand through regulatory reforms in the fields of agriculture, medical care/nursing and urban/community development, and (5) obtaining overseas demand through promotion of economic partnerships such as the TPP(Trans-Pacific Partnership), expansion of package-style infrastructure export, and efforts including tourism promotion.
As for fiscal reconstruction policies, Keidanren proposes: (1) comprehensive reforms of social security and taxes focused on ensuring controls on benefits through streamlining and prioritization in various areas of social security with ensuring stable revenue sources, and (2) introduction of new expenditure control programs by the establishment of a spending cap in each major policy area.
With the activities and efforts mentioned above, the Keidanren's macroeconomic model forecasts that -- achievement of government goals for real and nominal economic growth by 2% and 3%, respectively, in the next 10 years, as well as staving off an increase of public debt to GDP ratio at approximately 250% in the mid-2020s.