A Call for Formulation of the Effective Deregulation Promotion Plan toward the Post-Regulated Society
November 17, 1994
(Japan Federation of Economic Organizations)
I. Basic Idea
Role of the Effective Deregulation Promotion Plan
We are now in the period of reform. The government-led centralized socioeconomic system,
that supported economic growth and prosperity of Japan since the Meiji era, is to
end its historical role and task. To pave a new path of development toward the twentyfirst
century and build the country that fulfills the international responsibility and places
much emphasis on the consumers and customers, new socioeconomic system is required.
Now is the time to realize promptly the post-regulated society, that is based on freedom of
choice and buttressed by the principle of the self-responsibility.
It will inevitably cause a great pain to achieve the reform of the socioeconomic system.
It is, however, also impossible to reverse the roll of the wheel of the history. It is
required to promote the deregulation intensively according to plan and ease the conflict
in transition period. This historical role is expected for the current Deregulation Promotion Plan.
Three principles in the Deregulation Promotion Plan
The Deregulation Promotion Plan should take the basic idea for deregulation by The Advisory Group
for Economic Structural Reform, that states "Economic regulation should be eliminated in principle
and social regulation should be kept to a necessary minimum based on the principle of the
self-responsibility." In addition to this, the plan should meet the following principles.
(1) Zero-base principle
The government should carry out a review of all regulations and public
intervention/involvement based on the zero-base principle and clarify the processes and
target toward abolition or reduction in the Deregulation Promotion Plan.
(2) Sunset principle
When new regulations are introduced, it is obligatory to incorporate an article stipulating
abolition or review after a certain period of time (a maximum of five years).
(3) Due-process principle
In the process of Diet discussion of the bills that introduce new regulations, it should be
mandatory to listen to the views of related industries and parties concerning the bills and
their impact on the industries. In addition, when the government issues a piece of
administrative legislation, such as a cabinet or ministerial ordinance or an official notice,
it should publicly disclose the draft text in advance and public hearings on the draft text
should be convened obligatorily. Furthermore, obligation to hold the public hearings
should be guaranteed by enactment of the Administrative Legislation Procedures Law (provisional name).
II. Basic Request for Deregulation
Economic regulation should be reduced by half within five years
- It is necessary to show the whole shape of the deregulation plan for the public in clear
manner to promote the deregulation steadily. Therefore, the Deregulation Promotion
Plan should set the numerical target to reduce economic deregulation by half within five
years. The government should at least make utmost effort to promote deregulation in
the areas of table 1 written by the Advisory Group as examples in accordance
with the following direction and reduce it by half within five years. In the same time, the
government should take necessary steps to formulate the structural reform policies for
employment and small and medium sized companies, with the appropriate management
of the economy. Keidanren makes more effort to make a consensus with related
industries concerning specific regulation matters. It is urgently required to establish
the assessment method to evaluate deregulation in order to make the numerical target more effective.
- Direction of deregulation
- Entry regulation from the standpoint of demand-supply adjustment
This regulation should be promptly eliminated. Entry requirement other than
demand-supply adjustment should be minimized for the regulation that has been decided to be abolished.
- Regulation on new installation and expansion investment of facility
This regulation should be promptly eliminated. In particular, deregulation should be
promoted in the case to require the structural improvement and eliminated step by step.
- Import regulation
This regulation should be promptly eliminated in principle. In the case that effective
date of regulation is set by the international agreement, this regulation should be
eliminated upon termination of effective date.
- Price regulation
Elimination should be fundamental. If some regulation is necessary, it should be
limited as necessary minimum to the public goods and services. Price range system or
price ceiling system should be introduced as the regulatory manner.
- Regulation on finance, security and insurance industries
Regulation should be kept minimum from standpoint of financial order. Deregulation
makes it possible to promote offer of new financial products and services and mutual
entry to different areas and improvement of access to the more various and effective
services for customers in financial raising and operation.
- Other regulation
Economic regulation should be promptly eliminated in principle.
- The government should delete all designated products from the list of Resale Price
Maintenance System by the year of 1998 and abolish the exemption cartels of Anti
Monopoly Law based on individual law in principle.
In order to spread the effect of deregulation over the society and ease the conflict caused
by deregulation, it is indispensable to promote free and fair competition by active use and
implementation of the Anti Monopoly Law and competition policy. From this
standpoint, the government should delete all designated products from the list of Resale
Price Maintenance System by the year of 1998 and abolish the exemption cartels of Anti
Monopoly Law based on individual law in principle.
III. Main Items of Our Request
Review of auto-inspection system, Review of fare system in the passenger train system.
Gradual abolition of Large Retail Store System, Liberalization of the retail price of cigarettes.
Appropriate implementation of New Food Law (promotion of new entry to food collection and retail business etc.), Review of price support system (wheat, dairy products, pork etc.).
Zero tariff on auto-parts, Abolition of the exemption of export control regulation from the Administrative Procedure Law.
- Competition Policy
Permission of setting up pure holding company, Abolition of share-holding restriction by financial institutions.
- Public Procurement
Simplification and Unification of application procedure of entry requirement to public procurement, Abolishment of designated supplier system by local authorities.
Consideration of permission of self-service in the gas station, Simplification of application for permission in co-generation.
- Finance and Insurance
Review of public finance system such as postal saving and insurance, Deregulation of new office by financial institutions, Deregulation of pension fund management.
Deregulation of equity security financing by public offering at the market price, Registration at over the counter market and issuance of commercial paper.
- Public-purpose Institutions
Restraint of establishment of public-purpose institutions by government initiative. Simplification of permission for setting up public-purpose institutions by private initiative.
Other deregulation requests for Land/Housing, Safety, Environment and Waste Management, Telecommunication, International Finance, Taxation, Statistics, Economic Law and Accounting, Research and Development.
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