Keidanren's Priority Policies

In January 2003, Keidanren published a vision for the future titled Japan 2025: Envisioning a Vibrant, Attractive Nation in the Twenty-first Century. Japan's political, economic, and social systems have lost the ability to adapt swiftly to changing conditions, such as the country's falling birthrate and aging population and the intensification of global competition. Japan 2025 outlined a grand design for a private-sector-driven society characterized by individual autonomy, marking a shift away from the old bureaucracy-led model of growth. Our goal is a society in which individuals and corporations can freely express their creativity and the dynamism of individual diversity is harnessed for the development of Japan as a whole. At the same time, Japan should aim to be a nation that contributes to the international community and is trusted and respected by the world.

To realize this vision, politicians must display strong leadership in forcefully pursuing the reforms needed to tackle the falling birthrate, to revitalize the economy and industry, and to bring about austere, effective government, as well as in establishing firm security and foreign policies as the foundation of the nation.

Interim Policy Priorities

From this perspective, Keidanren believes the following 10 policy goals merit particularly urgent attention.

1. Tax and fiscal reform to boost Japan's economic dynamism and international competitiveness

• Comprehensive reform of the tax, fiscal, and social security systems to limit the latent national burden ratio (the ratio of tax revenue, social-security contributions, and public borrowing to national income) to around 50%
• Reduction of the effective corporate tax rate
• Implementation of the so-called trinity reforms (reform of government subsidies, the distribution of tax sources, and the local allocation tax system)
• Abolition of the special corporation tax levied on corporate pension assets
• Establishment of a Japanese limited-liability company (LLC) tax scheme and a tax scheme to promote human-resources investment

2. Comprehensive reform of the social-security system to remove the anxieties of the Japanese people

• Comprehensive reform of pensions, health insurance, and nursing-care insurance
• Maintenance of social-security contributions at levels that can gain the consent of current workers
• Procurement of funds for social security, including use of the consumption tax
• Introduction of social-security identification numbers and an individual accounting system

3. Regulatory reform, public-private partnerships, and the enactment of economic legislation to make full use of private-sector dynamism

• Establishment of a system aimed at introducing market testing (public-private competitive bidding)
• Lifting of the ban on "mixed medical care" (the provision of medical care that is not covered by health insurance alongside care that is) and introduction of a voucher system in the education sector
• Enactment of postal-privatization legislation that enables fair competition, adhering to the goals of the basic policy on privatizing postal services
• Civil service reform and reform of special public corporations and independent administrative institutions
• Review of the measures implemented under the Antimonopoly Law and establishment of appropriate procedures
• Modernization of the Company Law to facilitate efficient corporate management

4. Pursuit of policies to upgrade Japan's capabilities in science and technology

• Promotion of the development and commercialization of cutting-edge technology
• Promotion of multimedia, creative, and other contents industries
• Improvement of intellectual property policies
• Promotion of collaboration among industry, academia, and government
• Formulation of a third Science and Technology Basic Plan (committing 1% of GDP to the funding of science and technology)

5. Advancement of truly effective energy and environmental policies to bring about a sustainable society

• Establishment of a comprehensive energy strategy that encompasses the diversification of energy sources and accords nuclear power a central role
• Promotion of the nuclear fuel cycle and construction of the International Thermonuclear Experimental Reactor (ITER) in Japan
• Pursuit of global-warming policies that respect the autonomous initiatives of corporations, without resorting to environmental taxes and other measures that restrict economic activity

6. Educational reforms to nurture broad-minded individuals capable of fulfilling their potential

• Establishment of educational principles appropriate for the new era and revision of the Fundamental Law of Education
• School and classroom reform through the introduction of competition and an evaluation system
• Encouragement of schools founded by companies and nonprofit organizations and realization of schools run through public-private partnerships
• Reform of boards of education

7. Promotion of employment and labor policies that harness the diverse potential of individuals

• Establishment of employment and work styles that reflect diverse values, including those of women and seniors
• Pursuit of measures to combat the falling birthrate
• Introduction of a white-collar exemption system for working-hours regulations
• Use of the private sector to expand access to employment placement and advice services and skills development
• Pursuit of complementary youth employment policies by government ministries and agencies
• Abolition or slimming-down of the three employment insurance schemes and of the Workers' Accident Insurance scheme
• Acceptance of foreign workers in specialist and technical fields and fields in which there is a labor shortage

8. Promotion of regional autonomy and of vibrant, flexible, safe, and secure communities and cities

• Shift away from the centralized, bureaucracy-led model and promotion of regional administrative reform
• Improvement of the usability of social capital and use of private-sector management expertise and assets to develop such capital
• Establishment of a comfortable living environment through the supply of high-quality housing and improvements in disaster prevention and public safety
• Promotion of mergers among municipalities and introduction of a federal system
• Revitalization of regional economies by boosting the autonomy and dynamism of small and medium-sized enterprises and promoting tourism
• Improvement of transportation, distribution, and other infrastructure in major cities
• Establishment of housing-related tax systems, including a housing renovation tax scheme

9. Promotion of trade, investment, and economic cooperation policies appropriate to an age of intense global competition

• Prompt conclusion of the new round of WTO negotiations
• Conclusion of economic partnership agreements (EPAs) with countries and regions of importance to Japan
• Advancement of structural reform in the agricultural sector
• Promotion of a substantial increase in foreign direct investment in Japan
• Use of official development assistance (ODA) to advance trade negotiations
• Reform of import/export and port procedures

10. Pursuit of strategic foreign and security policies that adapt to changing domestic and international circumstances

• Foreign policy centering on the Japan-US alliance and a strengthening of cooperation in the East Asian region
• Establishment of a cross-ministry system to achieve comprehensive security in defense, economic, technological, and other fields
• Expanding the activities of the Self-Defense Forces for international cooperation and global peace, including keeping open the possibility of revising the Constitution

The above priority policies will be used as the criteria for Keidanren's policy assessment of political parties in 2005.