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• Working Style Reform
• Priorities of the Extraordinary Diet Session
• New System for White Collar Workers Which Values Performance Instead of Hours Worked
• Monetary Policy of the Bank of Japan
• Monju Fast-Breeder Reactor
• Establishment of Committee on TEPCO Reform and Fukushima Daiichi Nuclear Power Station
• Relocation to the Toyosu Fish Market

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Working Style Reform

The business community shares the view of the Abe Cabinet that working style reform constitutes one of the largest challenges. In particular, we consider breaking away from long working hours to be a critical issue. Keidanren has designated this year as the year for focused efforts for reforming working-style and establishing a work-life balance among employees. As part of this effort, 62 organizations including the four major business organizations (Keidanren, The Japan Chamber of Commerce and Industry, Japan Association of Corporate Executives, and National Federation of Small Business Associations) adopted the Corporate Executives' Declaration on Working Style Reform. The Declaration commits corporate executives to reform their own mentality in order to bring changes to Japan's workplace environment and corporate culture, including working styles based on long working hours. The business community will engage in these initiatives in concert with the government.

In July, Keidanren compiled a policy proposal regarding the realization of equal pay for equal work. In this proposal, we underscore the importance of rectifying unreasonable differences in treatment, while sufficiently taking into account Japan's unique employment practices. For example, in Europe, it is straightforward: in principle, the same wage is paid if the work is the same. In the case of Japan, however, even if workers are engaged in the same work at one point in time, wages reflect employers' expectations for their future role and contribution to the job, which raises the question of how this is evaluated. This is an employment practice called balanced treatment, which is unique to Japan. The competitiveness of Japanese industries traces back to such employment practices, and they need to be respected. Rather than worsening the treatment of full-time employees, we need to improve the treatment of non-regular workers by developing systems that allow them to switch to regular employment, as well as improving wages and allowances, and thereby, rectify unreasonable wage disparities.

The existing "36 Agreement" permits unrestricted overtime work, and in this regard, we are moving in the right direction by revising this framework, including establishing limits on overtime work. However, the revisions need to be examined from the perspectives of both worker protection and continuity of business operations. We cannot let business operations fall by the wayside. In addition, there are differences by type of industry. For example, many drivers and medical personnel have long working hours. There are also periods when work is busy, for example, during the budget formulation period or at the height of the development of a new product. Then there are periods when work is slow. The discussion on the limit needs to take such situations into account. Deciding the limit in a uniform manner by neglecting these aspects will have severe consequences on the economic situation.

Priorities of the Extraordinary Diet Session

The extraordinary Diet session has commenced. We expect that key bills will be passed amid the many mounting challenges. Prime Minister Abe stated in his policy speech that the government would not avoid the imminent issues and seek to tackle the difficult challenges, and deliver results through engaging in constructive discussions. We hope this will be the case. Specifically, I am referring to the passage of the second supplementary budget. Another item that must be approved is the Trans-Pacific Partnership (TPP). Both US presidential candidates, Mr. Trump and Mrs. Clinton, have expressed opposition or passiveness towards the TPP during their campaigns. Mr. Trump said the United States would withdraw from the agreement, while Mrs. Clinton said the United States needs to renegotiate. It is anticipated that it will become difficult to pass the TPP if the ratification process in the United States continues into the new administration. Therefore, I strongly expect that the US Congress would approve the TPP during the current administration. President Obama has indicated keen intent to have the TPP approved while he is still in office, and it is important that Japan quickly approves the TPP, which would push the United States to do the same.

The supplementary budget and the TPP are vital and must be passed. Furthermore, I expect the Diet to pass other critical bills, including those associated with the postponement of the consumption tax increase and the bill to amend the Labor Standards Act.

New System for White Collar Workers Which Values Performance Instead of Hours Worked

The new system for white collar workers that was included in the draft revisions of the Labor Standards Act is a framework for paying wages based on performance rather than working hours. This scheme will contribute to rectifying long working hours and promoting women's active participation in the workforce, and does not contradict with working style reform. This is a common scheme in North America and Europe. A system that pays employees based on performance rather than working hours is more convenient for those engaged in R&D or marketing. Creating an environment or system that gives employees free discretion will be a significant contribution to working style reform. Mechanisms have been put in place to prevent unrestricted working hours, which has been a point of concern. I believe the scheme should be introduced to offer a new style of working.

Monetary Policy of the Bank of Japan

The new policy announced by the Bank of Japan (BoJ) last week will correct the adverse aspects of negative interest rates and demonstrates BoJ's strong commitment to monetary easing. On the whole, the policy further solidifies expectations towards the price target of over 2%. That said, economic growth cannot be achieved with monetary policy alone. Monetary policy coupled with the growth strategy makes economic growth feasible. Now that the financing situation is picking up, it is important that companies carry out proactive business expansions and promote the growth strategy.

To increase the effectiveness of the monetary policy, it is also essential to deepen understanding of the BoJ's policy intentions among the economic actors, including companies, households, and market participants. The BoJ is urged to strengthen policy communication which includes dialogues with the market.

We are currently at the juncture of mobilizing various policies to exit deflation and revitalize the economy. I consider last week's BoJ's decision to be the best monetary policy it could possibly take. Meanwhile, we need to closely monitor the impacts of issuing more government bonds on fiscal discipline.

Monju Fast-Breeder Reactor

Japan should carry on efforts to establish a nuclear fuel cycle from the standpoint of proceeding with the use of nuclear power and contributing to the peaceful use of nuclear power worldwide. Monju will be subject to fundamental reviews including whether it should be decommissioned. The reviews will be undertaken with the attendance of the government officials concerned, electric power companies, and manufacturers, with a view to setting a direction by year-end. The newly formed body will need to decide on a direction for the research on the fast-breeder reactor. We consider that R&D should continue, including international joint R&D.

Establishment of Committee on TEPCO Reform and Fukushima Daiichi Nuclear Power Station

I nominated Chair Onodera of the Committee on New Industry and Technology as a member of the government's newly established Committee on TEPCO (Tokyo Electric Power Company) Reform and Fukushima Daiichi Nuclear Power Station. The major items on its agenda are: 1) bringing an end to the nuclear power accident; 2) reconstructing Fukushima; and 3) reforming the business practices of TEPCO. In addition to TEPCO's management reforms, we urge the Committee to discuss relief for the affected people and institutional reforms for decommissioning Fukushima Daiichi Nuclear Power Station.

Relocation to the Toyosu Fish Market

Governor Koike of the Tokyo Metropolitan Government (TMG) stresses the need for greater transparency in the management of the city government, information disclosure, accountability, as well as food safety and a safe and secure life for the citizens of Tokyo. As stated by Governor Koike, it is important that there is thorough disclosure of information on issues related to aspects such as safety and cost. TMG should investigate into the Toyosu relocation matter in a way that gives reassurance to and is acceptable to Tokyo citizens. At the same time, however, we cannot spend endless time on this issue, as it also impacts the Tokyo Olympic and Paralympic Games. I hope that TMG presents a clear roadmap for the relocation soon, while allowing stakeholders including Tokyo citizens and businesses to gain a deeper understanding.