Executives' Comments Press Conferences
Chairman Sakakibara's Statements and Comments
at His Press Conference
At the meeting of chairman and vice chairs today, we discussed a draft of the 2016 Committee on Management and Labor Policy report. It is a fundamental principle that wages should be determined by each company based on its payment capacity, business performance, and results of management-labor negotiations. Based on this premise, at a Public-Private Dialogue meeting the other day, we told companies with expanded profits that we expect them to raise wages from this year's wages on an annual salary basis. We received endorsements for the idea from vice chairs who participated in the meeting today. Next year's report of the Committee on Management and Labor Policy will be finalized at a meeting of chairman and vice chairs on Jan. 12, following discussions at the committee's meeting this month. As for raising the base wage, meanwhile, we are not at the stage of saying anything specifically and how to mention the issue in the report will be discussed from now on. It is important to consider wages from a comprehensive perspective including raising the base wage, a regular pay raise, allowances, and bonuses.
It is necessary to thoroughly examine the content of the labor union's demand in a comprehensive manner. Even if the union's request for raising the base wage is less than what was requested this year, there is a possibility that the union is making collateral requests. A base wage increase does not determine everything, and we cannot indiscriminately say the union's request level is lower than this year's level.
Recruitment and employment of new college graduates
A draft revision of the guidelines and handbook for the recruitment and employment of new college graduates was discussed and approved at today's meeting of the chairman and vice chairs. We will let the member companies know about the revised guidelines and handbook through official publications and at meetings of the Policy Board or other occasions. We are not in a position to call on non-member companies to understand the revision and we know the government will do so soon.
This year's recruitment and employment activities became long in the hot summer season for students and have caused trouble for schools in terms of theses, research, experiments and other academic activities. Also, companies, especially small and medium-sized companies, were frequently faced with declining job offers by students. Often, Keidanren member companies were not able to reach the initial target number of hiring and not able to secure good human resources due to the influence of the behavior of companies which did not abide by the government's request. As witnessed, this year's schedule had a negative impact on students, universities and companies and we revised the guidelines to improve this situation to any extent at all. In the revised guidelines, the August start of employment screening is moved up by two months to June while the March 1 start of publicity activities is maintained from the standpoint of allowing students to concentrate on their studies. We hope that problems surfacing in this year's schedule will not be observed next year and all three parties will get close to their goals.
Corporate tax reform
FY2015 Tax Reform broadly indicates that the effective corporate tax rate will be lower to below 30% soon and Prime Minister Abe has been making comments supporting the trend. My understanding is that discussions are currently underway to lower the rate to below 30% in fiscal 2016. Keidanren has been strongly hoping for that, so if it is realized we would greatly welcome it.
Regarding revenue sources, I understand that final discussions are underway in ruling parties' deliberations on the tax system, as well as on other occasions. I believe some specific ideas will be presented within this week and the business community will provide support in securing revenue sources in some way.
Regarding an expansion of the pro-forma standard taxation, the framework, which will make the ratio of the tax rate on income and the pro-forma standard taxation 4:4 in fiscal 2016, was determined in FY2015 Tax Reform and it is currently being discussed whether to expand it further. I think it can be determined in discussions on the whole tax system reform. My understanding is that it will be decided in a comprehensive manner considering the entire balance.
Issue of non-regular employment
Support measures for workers in their 30s and 40s, among some 19 million non-regular employees, who are unwillingly stuck in non-regular employment, should be intensively implemented. This idea is shared with the government and about 800,000 involuntary non-regular employees in the age group of 25-34 should be preferentially turned into regular employees. Health, Labor and Welfare Minister Shiozaki directly asked us for cooperation and the business community will provide our best possible support. There are various forms of regular employment. Keidanren hopes that the trend of regular employment will proceed in accordance with each company's situation.
It was proposed at a recent meeting of the Council on Economic and Fiscal Policy that the minimum hourly wage would be raised at an annual rate of around 3% to a national weighted average of 1,000 yen, although a specific time frame was not mentioned. We consider it as a very important issue from the standpoint of stimulating consumption. On the other hand, the minimum wage is a legally binding system and it needs to be determined in consideration of the payment capacity of companies, especially micro, small and medium-sized enterprises.
The amount of political donations to the Liberal Democratic Party headquarters from companies and organizations through the People's Political Association increased by about 10% in 2014 from 2013. In September 2014, Keidanren called on member companies to make political donations as part of social contribution activities based on their own decisions and we think it was a result of member companies and organizations responding to our call based on their own decisions. Keidanren has done nothing other than issue a call and the companies voluntarily responded to it.
Also, I think banks are considering resuming political donations based on their own decisions. Keidanren has been preaching the importance of the social contribution aspect of political donations but how companies take the message and respond to it is up to them.
Mission to India
Keidanren will send a mission to India along with Prime Minister Abe's visit to the south Asian country. Japan and India are strategic global partners and leaders of the two countries continue their shuttle diplomacy. The business community has been holding Japan-India business leaders forum on occasions of top leaders' visit. Last year, the forum was held in September in Tokyo when Prime Minister Modi visited Japan. This year, it will be held in New Delhi on the occasion of Prime Minister Abe's visit to India. The outcome of the forum will be compiled into a joint report and handed to the leaders.
India is one of the countries on which the Japanese business community places priority. In the last 10 years, investment in India expanded seven- to eight-fold and the number of Japanese companies doing business there has increased to around 1,200. However, the business environment in India including infrastructure has not developed enough yet. We would like to explore the cooperative potential between the countries to resolve these issues through this mission.