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

July 11, 2016

Upper House Elections

The ruling LDP-Komeito coalition won a far larger number of seats than Prime Minister Abe's original goal, taking a majority of the seats contested by the LDP-Komeito coalition. I consider that this outcome reflects voters' support of Abenomics and their desire for the government to continue pursuing its policies with a stable political base.

The business community highly rates the Abe administration's past domestic and foreign policy initiatives, and wholeheartedly welcomes the stable political foundation created by this election and the assuarance of policy continuity.

Japan is now at a crucial stage in its efforts to end deflation, steadily revitalize the economy, and put the country firmly on track to achieving an economy with GDP of 600 trillion yen. However, the economy is currently at a standstill, and risk factors for the global economic outlook, such as Britain's withdrawal from the EU, are increasing.

Having won the trust of the people, the Abe administration should stimulate individual consumption and investment, and swiftly develop and implement bold, comprehensive economic policies to avert the risk of a global economic downturn. At the same time, it should devote every effort to making progress on important policy issues, including implementation and accomplishment of growth strategy, rapid approval of the Trans-Pacific Partnership agreement, greater efficiency and streamlining of social security benefits, labor market reforms, and drastic regulatory reforms.

Keidanren will cooperate in implementing all aspects of the Abe administration's policies and strive to make Japan the prosperous and dynamic country envisaged in our Vision for 2020.

Economic Policy

I expect the government to take bold, comprehensive measures to stimulate consumption strongly, and I will engage in concrete discussions in the Council on Economic and Fiscal Policy to this end. The most important short-term measures are kick-starting sluggish individual consumption and encouraging corporate investment. Over the medium to long term, the two key policy pillars are further regulatory reform and implementation of the "Public-Private Strategic Project 10." Although I cannot refer to the specific scale of such economic measures, I expect strong, decisive action.

With the government having few financial resources, various schemes are required to find sources of revenue. Japan needs bold, comprehensive economic measures driven by mechanisms such as fiscal investment utilizing ultra-low interest and government construction bonds. As much as possible, the government should limit the haphazard and short-term responses of the past and focus on pushing ahead with structural reforms and growth strategy. National-level infrastructure projects that will raise Japan's mid- to long-term growth potential include bringing forward the timetable for extending the new maglev Shinkansen service to Osaka and forging ahead with other planned Shinkansen lines.

Constitutional Revision

Ending deflation and revitalizing the economy are currently the most important policy challenges for Japan, and the business community would like the government to place top priority on economic policies. Japan's Constitution is the supreme law of the nation, and we need to accord full weight to its importance. This is not to say I believe the Constitution, including amendment requirements, should not be revised based on changes in the times as necessary. Many countries have revised their constitutions to meet evolving needs arising from changing times. Seventy years have passed since the Japanese Constitution was enacted, and there is a need for thorough discussion among people in all fields and at all levels about how to ensure it remains aligned to the times. I support Prime Minister Abe's idea of beginning bipartisan discussions in the Deliberative Council on the Constitution in each chamber of the Diet.

Keidanren will determine its response to individual points by closely monitoring the Diet debate on constitutional revision, discussing the issues, and formulating opinions as required. We do not have any intention to lead discussion relating to constitutional revision. In addition to Article 9 and security issues, there are some familiar points at issue such as education and the environment. We will carefully observe discussions in the Diet.

Social Security Reform

The fundamental direction of social security system reform is streamlining and efficiency of benefits, and the expert panel of the Council on Economic and Fiscal Policy is discussing 44 specific items with a view to streamlining and efficiency, including key performance indicators and process charts. Some of these points may be quite painful and provoke reactions from interested parties, but reform of social security systems must be addressed as a priority issue. Although postponement of the rise in consumption tax has restricted sources of revenue, priority needs to be placed on enhancing nursing care and supporting those raising children.

Sendai Nuclear Power Plant

Nuclear energy is a vital source of base load power in terms of energy security, economical supply, and environmental compatibility. Once safety has been assured and the understanding of local residents has been gained, nuclear generation needs to be used as a base load power source. The Nuclear Regulatory Commission inspected the Sendai Nuclear Power Plant and deemed that there were no obstacles to its operation from a safety perspective. It has been operating with the understanding of local residents, and I hope that it will continue to operate. In order to allay concerns, the government and other parties involved should carefully explain the safety of nuclear power plants that comply with new regulatory standards to the newly-elected governor of Kagoshima Prefecture, local residents, and the people of Japan as a whole.

Recruitment of New College Graduates

The graduate recruitment campaign schedule has been revised this year, and the start of the selection process was brought forward from August 1 to June 1. We are currently conducting a survey of activities under this year's schedule and will consider the timetable for subsequent years in light of the survey results. I understand that these changes from last year have improved the recruitment process, and that no major problems have been indicated. We will decide the approach for next year and beyond once we have completed our survey and assessed feedback from companies, universities and students.

Terrorist Attack in Bangladesh

I would like to express our sorrow for those who died in the dreadful terrorist attack in Bangladesh and convey our condolences to their families. Increasing numbers of Japanese companies have begun operating in Bangladesh as its economy and society have developed, and they have made a significant contribution to the country's economic growth. It is profoundly unfortunate that such a tragic terrorist attack occurred, and the actions of the terrorists fill me with rage.

Companies must continue to expand their overseas operations while safeguarding the lives of their employees. I hope that the government of Bangladesh will devote every effort to restoring and maintaining public safety, so that this incident does not affect the business activities of Japanese companies. I also hope that the Japanese government will reinforce its capabilities in gathering and disseminating information and make the utmost effort to ensure the safety of Japanese nationals overseas, to prevent security concerns from impeding business activities.

Rio de Janeiro Olympic and Paralympic Games

I expect that the Rio de Janeiro Olympic and Paralympic Games will be a splendid, safe, and successful event, and that Japanese athletes will play a big part. I hope that the feats of Japan's Olympic team will spur consumption related to the event and put people in a positive frame of mind. These Olympic and Paralympic Games have a special significance for Japan, since the following Games will take place in Tokyo. We need to pay especially close attention to the know-how of the organizers in Rio, in order to carry on their good work when the baton passes to us.

Executives' Comments