Following is the gist of remarks made by Mr. Hiroshi Okuda, Chairman of Nippon Keidanren, at a press conference following monthly Chairman and Vice Chairmen's meeting on 10 June 2002. Translation is rush and tentative, and sequence of the gist does not necessarily coincide with words delivered.
(Asked on the state of Japanese economy)
Quarterly GDP growth estimate announced last Friday showed considerable recovery. However, I must emphasize that facilities investment, machine orders, and housing starts are very low and unemployment figures remain high. At the same time, economic recovery in the U. S. may not be as quick and sustained as we have once expected. All these factors may bring doubts towards the figures in the second and third quarters.
(Asked about new tax reform proposal)
The key component is to reduce effective rate of corporate tax and to say no to "pro forma standard taxation," hopefully by the next fiscal year. The rate I am seeking in corporate tax is 35%, equivalent to the level in Europe. Regarding "pro forma standard taxation," I think the government needs to study further on other taxes, which takes the form of "pro forma standards," such as properties tax. In any case, the current tax scheme is a patchwork of corrections made on the post-war taxation principles -- any changes to it would aggravate distortions, and Nippon Keidanren's proposals to start discussion from taxation principles sounds clearer. In future, the government will have to raise the consumption tax from 5% now to 10% or 15% sometime between now and 2010.
(Asked on Finance Minister Shiokawa's comment to limit government spending)
Amongst policies the government could promote, such as deregulation and tax system reform, the biggest agenda is to cut the government spending in areas such as public investment and social security. I know that there are varying opinion on how far the cut must be made -- some say 3%, others say 10% over the fiscal 2002 figures.
(Asked on ratification of Kyoto Protocol and Japanese energy policies)
The Protocol was ratified and there is nothing we can do about it. For Japan to keep its promise, it is absolutely necessary to promote nuclear energy further, along with all other new energy resources. It is also very important for the Japanese government to find ways to invite the U. S., Canada, Australia, and other countries opted out to be back in the global framework. I also realize that Nippon Keidanren will study so-called Environment Tax scheme even though the necessity of the tax is still in doubts.
(Asked of his opinion over the "World Cup fever")
It is nice to see that Japan united under its flag for the win. If this fever means exiting from economic stagnation, it will be most appreciated.