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

October 18, 2021

Council for Realizing New Capitalism

Inasmuch as "new capitalism" is consistent with the concept of "sustainable capitalism" advocated by Keidanren in ". The NEW Growth Strategy," we would like to implement the policies under this strategy through the Council for Realizing New Capitalism. Unbridled capitalism has resulted in the widening of social disparities, the destruction of the ecosystem due to climate change, and such other side effects. These harmful effects further aggravate the current Covid-19 pandemic. The world needs to recover from the damages it has suffered through new capitalism.

In terms of eliminating disparities, economic growth must be the top priority. Amid the shrinking average income in Japan, income will remain low even if measures to rectify disparities are taken. Therefore, it is necessary to enlarge the economic pie in order to raise the per capita income. Both the Abe and Suga administrations worked on reducing disparities. We hope the Kishida administration will also formulate and implement growth strategies in order to promote this policy even more vigorously.

Restoring Fiscal Health

Restoration of fiscal health is a top priority issue for Japan's economic society. The government plans to review and confirm the target year for achieving a primary balance surplus during the current fiscal year while maintaining its goal of doing so by Fiscal 2025. However, the economy forms the foundation of government finances. Under the current situation, fiscal spending will still be required for some time to come. While fiscal discipline must be maintained in the mid- and long-term, there will be times when wise fiscal spending will be unavoidable in response to certain needs.

Rising Crude Oil Prices

The background to the spiraling crude oil prices is that OPEC and other oil-producing countries are maintaining their current pace of production increase despite the surge in demand for crude oil amid the resumption of economic activities under the Covid pandemic. In addition, oil prices are likely to remain high for a period of time due to instability in the Middle East situation and restraint in the development of oil fields in consideration of impact on global warming.

Financial Income Taxation

[When asked about Prime Minister Kishida's deferring a review of financial income taxation] This review is a policy that is easy to understand and symbolic for the people among the many wealth distribution policies to build a robust middle class. However, the Prime Minister has probably decided that in terms of policy priorities, a review of financial income taxation is an issue that needs to be handled carefully based on an in-depth dialogue with the market. Therefore, this will not be included in the tax reforms for the next fiscal year.

Quarterly Disclosure

[When asked about Prime Minister Kishida's statement on reviewing quarterly disclosure] We understand that this statement was from the long-term standpoint of improving the corporate management environment. While the quarterly disclosure of financial information is a tool for constructive dialogue between companies and investors, the quarterly financial results and quarterly report seem to be redundant. In any case, any drastic systemic change is bound to bring about unwarranted confusion in the market, so careful consideration is necessary.

Wage Increases

The rule of thumb for raising wages is that this should take place only when earnings increase as a result of improved productivity. Keidanren has been urging such companies to increase wages in the reports of its Committee on Management and Labor Policy and other documents.

Improving the productivity of small and mid-sized enterprises, which make up the majority of Japanese companies, is particularly indispensable for increasing labor productivity in Japan. At the same time, fair transaction prices are important for ensuring that profitability is not compromised. Keidanren is calling for cooperation with the government's "Declaration of Partnership Building" initiative and is confident of the success of this effort. We ask the government to continue efforts to improve the business environment, such as expanding support measures for the enhancement of productivity.

Business and Human Rights

Human rights constitute a universal value on par with freedom, democracy, and the rule of law. Businesses are social entities, and as such, they must conduct their activities with full consciousness of social norms and must, naturally, be mindful of human rights. On the other hand, human rights cover a broad range of issues, and it will be difficult for companies to deal with them on their own in some cases. Support and advice from the government, such as provision of information relating to human rights in other countries, is necessary. Keidanren calls for "respect for human rights" in its "Charter of Corporate Behavior." It plans to revise the guidelines for the implementation of the Charter and draw up a useful handbook for corporate actions within this year.

TSMC's Construction of a Plant in Japan

Economic security is one of the top priority issues at present. It is very important to cooperate with like-minded countries to build supply chains for critical technologies and essential products. TSMC's plan to build a new plant in Japan is very much welcome as part of this effort. We can also hope for power semiconductors in the future. At present, Japan still enjoys an advantage in the development and production of materials, devices, parts, and so forth. Inviting TSMC to set up its production facility in Japan will further enhance Japan's strengths.

Beijing Winter Olympics and Paralympics

[When asked about expectations for the Beijing Winter Olympics] The Tokyo Olympics showed the world that the Japanese people, working together, successfully hosted the Games and made a profound impact on many people despite the Covid pandemic. We hope that the Beijing Games will carry on this mission. We also hope that the Beijing organizers will make good use of the pandemic prevention experience and knowledge gained at the Tokyo Games.

Executives' Comments