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

October 24, 2016

Measures to Stimulate Consumption

The "Premium Friday" campaign currently being planned by the government and consumer industries is a high-profile measure to stimulate consumption, and the business community will cooperate in all aspects of the initiative. This campaign will counter the deflationary mindset and get consumers spending again in the aim of achieving strong personal consumption. Encouraging consumption of premium products and services is essential. The campaign also suggests a new lifestyle for consumers, where they finish work around 3:00pm on the last Friday of the month to enjoy shopping and dining out, and Keidanren will do its utmost to make the campaign a tremendous success.

BOJ Monetary Policy

When the Bank of Japan announced the introduction of quantitative and qualitative monetary easing with yield curve control in September, it conducted a comprehensive assessment of monetary policy to date. The decline in oil prices, uncertainty in the global economy, slowdown in emerging economies, and weakness in demand following the consumption tax increase were cited as the main reasons for not achieving the anticipated price stability target, and these factors are understandable. Now is not the time to talk about the need for further easing, and I intend to closely monitor actual trends.

Reconsideration of Economic Statistics

Resources devoted to compiling statistics have been restricted as government statistical staff numbers have been slashed over the past ten years and budgets have suffered a slight decline. Moreover, existing statistical surveys are not able to keep up with evolving needs and major changes in society. Measures to improve statistical accuracy are required, and statistics need to be re-worked in accordance with the times. The Ministry of Internal Affairs and Communications Statistics Bureau should take the lead in these efforts and strive to enhance its functions by improving statistical quality, rationalizing existing statistics-gathering, and establishing new statistical surveys.

Revised criteria for calculating GDP that deem R&D expenditure to be part of investment are estimated to increase GDP figures by around 20 trillion yen. When such revisions are made, continuity with past statistics needs to be ensured.

Reform of Nursing Care Insurance Scheme

Suggestions for adopting an income-linked approach to calculating nursing care insurance premiums are based on the idea of picking low-hanging fruit, and the first aim should be to control expenditure on nursing care benefits. According to Ministry of Health, Labour and Welfare estimates, such an approach would have widespread effects, including increasing premiums for more than 1,000 health insurance associations and over 12 million of their members. Curbing expenditure on nursing care benefits must be the top priority. If this is achievable, there is scope to discuss an income-linked approach to calculating premiums.

Reducing nursing care benefits will be a painful reform for the populace, but such pain cannot be avoided if Japan is to ensure the sustainability of its social security system.

Spring Labor-Management Wage Talks

The Japanese Trade Union Confederation recently announced its fundamental views on next year's wage talks, and will use these as the basis for discussion with its regional network and industry-specific labor unions before determining its formal policy at the end of November. The Keidanren Committee on Management and Labor Policy will compile its 2017 report in January next year, clarifying our basic understanding of the current employment and labor situation and the fundamental management position for the coming round of spring labor-management talks. Discussions have only just begun, but we hope to maintain some form of momentum for wage rises.

Working Style Reform

Suicides resulting from excessive work are tragedies, and should never occur. Top management must take the lead in implementing measures to prevent death from overwork. Keidanren has designated 2016 as the year for focused efforts to reform working style and establish a work-life balance among employees. In particular, we consider breaking away from excessive work and long working hours to be a critical issue, and we intend to encourage efforts to address this issue throughout the corporate community.

Legislative responses to the issue of long working hours are being considered, and Keidanren will play an active part in discussions. At the same time, we will urge the business community to make voluntary efforts. Coupled with government initiatives, we hope that these will lead to eradication of the long working hours culture.

Spousal Tax Exemption

Creating an environment that incentivizes women to work is an important issue, and the barrier presented by the 1,030,000 yen tax exemption for spouses should be lowered or removed. Various proposals for addressing this issue have emerged, but all will create winners and losers as well as impacting on tax revenue. Once all proposals have been considered, priority should be placed on creating an environment conducive to women working, and the issue of the 1,030,000 yen barrier should be rectified as quickly as possible.

Energy and Global Warming

Assuring safety is the top priority when re-starting nuclear power plants. The Nuclear Regulation Authority has determined safety standards and is carrying out inspections. I hope nuclear power plants that have passed these inspections will re-commence operations once safety has been assured and the understanding of local residents has been gained.

At the same time, under the Paris Agreement Japan has committed to a medium-term target of reducing greenhouse gas emissions by 26% from FY2013 levels by FY2030, and this target must be achieved. It is predicated on nuclear power accounting for 20-22% of the energy mix. Moreover, we are faced with the challenges of reducing household-sector CO2 emissions by 40% and raising the proportion of renewable energy. Only by achieving all of these goals can we reach the 26% GHG emission reduction target. Measures to combat global warming are crucial to lives and lifestyles, as well as being an international commitment. The deadline of 2030 is fast approaching, and these points need to be included in overall consideration of the re-start of nuclear power plants.

Japan-Philippines Relations

The entire Japanese business community welcomes President Duterte's first visit to Japan. The Philippines and Japan have built a long-standing, amicable, and mutually beneficial relationship. This year marks the 60th anniversary of the normalization of diplomatic relations between our two nations. We enjoy especially close economic relations, and Japan is the Philippines' largest trading partner. It is also the biggest investor in the Philippines, with some 1,500 Japanese companies currently doing business in the country. Japan is the largest contributor of ODA to the Philippines. Moreover, the Philippines is the closest ASEAN nation to Japan, and is expected to become an important base for building supply chains facilitated by the Japan-Philippines Economic Partnership Agreement, the ASEAN-Japan Comprehensive Economic Partnership Agreement, and the ASEAN Economic Community launched last year. President Duterte has drawn up a 10-point economic agenda including relaxing restrictions on foreign investment, improving the business environment, accelerating infrastructure investment, and enhancing technological innovation and creativity. We look forward to steady implementation of these measures and improvements to the business environment with a view to even stronger economic relations.

Constitutional Reform

Seventy years have now passed since the Japanese Constitution was enacted, and common sense suggests the possibility of amending it in line with changing times. However, Japan's top priorities at present are ending deflation and revitalizing the economy, and we must not be distracted from addressing these issues. Discussion of constitutional reform must not impede progress on Diet deliberations and policy-making related to economic measures.

Executives' Comments