May 22, 2017
The Peter Rabbit Garden cafe evokes the image of a cottage in the lake district of Northern England. The cafe is themed with Peter Rabbit series…
I have been appointed by Prime Minister Abe to be Minister of Economy, Trade and Industry, Minister for Industrial Competition, Minister for Economic Damage Due to the Accident at the Nuclear Power Plant, Minister of State for Special Missions and Minister for Nuclear Damage Compensation and Decommission of Nuclear Reactors.
I have a relationship with the Ministry of Economy, Trade and Industry (METI), and I recently have been communicating with them about taxation policy. About 40 years ago, I visited the Ministry tointerview (for a position in the Treasury). My paternal uncle, Kiichi Miyazawa, had been Minister of Economy and Trade and my maternal uncle, the current Minister of Foreign Affairs Kishida, had been the Minister of Small and Medium Enterprises (which is affiliated with METI). I am so glad that I am able to become the Minister of Economy, Trade and Industry, because I feel a connection with it in so many ways, as I already mentioned. But I am also humbled since METI deals with wide ranging issues, especially the reconstruction of Fukushima and policy dealing with the water contaminated by radioactive materials emitted from the Fukushima Daiichi Power Plant. These two issues are the most critical for METI. On this point, I would like to listen sincerely to the opinions of people in Fukushima and I would like to make steady progress.
As for my policies as Minister, I list three. One, I will push forward with responsible energy policy. There are numerous problems that energy policy is facing. But, I would like to promote energy saving and the use of sustainable energy and decrease our dependency on nuclear power as much as possible. Moreover, I think that the nuclear power plants whose safety has been confirmed should be restarted. In practice, I would like to promote renewable energy in a sustainable way, including restarting the Sendai Nuclear Power plant and reforming of the electric power system.
My second policy is measures to help medium and small-sized firms and revitalize rural areas. The source of Japan’s power is its energetic small and medium sized firms. There are 3,850,000 such firms across Japan. Without revitalizing these firms, Japanese rural areas cannot be revitalized. In order to carry out policies like “Cool Japan”, we must realize the potential of small and middle sized firms and the role of agriculture in our economy. In order to work towards this goal, I have already submitted a bill to Parliament that should create demand for small and medium sized firms. I would like to see this bill become law as soon as possible. My third policy is to promote the “Growth Strategy,” the third pillar of Abenomics, which I believe is the most important part of Abenomics.
I think that this growth strategy will change the engine of Japanese economy. The engine that drove rapid economic growth in the past was very powerful, but it was not energy efficient. It needed a lot of fuel and also it was not good for the environment.
(The Cool Japan policy was proposed by the METI. METI wants to promote Japanese culture abroad in order to boost demand for Japanese goods. Japan has suffered from deflation due to weak demand for about 20 years. The Cool Japan policy aims to increase the exposure of Japanese culture such as animation, comics and fashion in foreign countries. By doing so it hopes to make foreigners interested in Japan so that they will come to Japan for pleasure or business. This would create demand in Japanese economy. )
I believe that it is important to change the engine of economy from the old one to a new one which is like a hybrid car. The new engine might be less powerful compared to the old one, but it is energy efficient and good for environment. The actor who can play the main role in this will be small and middle size firms. Moreover, I would like to work on lowering the corporate tax, the creation of venture companies and use of robot technology, the export of infrastructure and the cool Japan strategy. Some these things that I listed can be done relatively easily, but there are things that take time too. But, I would like to strive to create this new economic structure.
There are many difficulties laid in front of me, but I will strive to work on Economic and Industry Public Administration with all of my might.
Questions by reporters start.
The former Ministry of Trade, Economy and Industry Yuko Obuchi resigned yesterday over improper use of political funds. What do you think about that incident?
I understand that the issue of politics and money has been around for a long time. It is an issue that cannot be resolved immediately. I have been given life and political lessons by my father and my uncle. They taught me that a politician must be very careful with the use of political funds.
Just as I referred to the saying “one should not touch his crown under a plum tree,” yesterday, I will continue to uphold the ethical standards required of politicians.
( His father, Hiroshi Miyazawa was Minister of Justice between 1995 and 1996. His uncle Kiichi Miyazawa was Minister of Economy, Trade and Industry between 1970 and 1971 and was also Prime Minister between 1991 and 1993.)
(There is an old proverb from ancient China that says one “should not touch his crown under a plum tree”, because it might look like you are trying to steal plums.)
What do you think about the stagnation of progress in parliament due to the scandals related to former Ministers?
The second Abe government that has been in office since December two years ago is a stable regime which we have not seen for a long time. Because of this stability, wonderful positive results have been achieved. However, modern life is plagued with many difficult problems. In such an era, if politics are unstable, it is totally understandable that citizens are irritated. I believe that it is the Abe administration’s duty to carry out policies sincerely so that people will not be irritated as much.
What do you think about corporation tax?
As for reduction (lowering of corporation tax), the Liberal Democratic Party decided to lower corporation tax to between 20% and 29% over several years. Yesterday, I said to the Prime Minister that my position of offense has changed into defense. ( Which means that Miyazawa was opposed to lowering corporation tax but, now that he has made the decision to become a minister, he has compromised and agreed to lower corporation tax).
Until I became a minister, my stance was that if the government lowers the corporation tax, it has to secure another way of raising tax revenue.
METI does not say tax revenue, they call it financial resources. There is a gap between tax revenue and financial resources, so I am thinking about how to fill this gap.
There are differences of opinion, but the Ministry of Finance and METI must both work to make this economy grow. If the interest rates increases unexpectedly, it could lead to as loss in credibility for the financial affairs of the country, so both Ministry of Finance and METI have an interest in improving the health of the nation’s financial affairs. But I assume that there are many ways to achieve this. Ultimately corporation tax issues will be decided by the Tax System Study Council of the Liberal Democratic Party. I would like to assist the council in this matter as well.
Are you going to go to Sendai Nuclear Power Plant?
Of course. I would like to Kagoshima as soon as possible.
( Sendai Nuclear Power Plant is located in Kagoshima Prefecture).
Where should the boundary of the area where the Japanese government asks for consent to restart the Sendai Nuclear Power Plant be? There are those that argue that the government ask the residents of neighboring cities.
I think that it is important to respect the thoughts of people in every of Kagoshima (the prefecture surrounding the plant). It is not for me to decide, I would like the residents of each area to sum up their opinions.
As for reduction of corporate tax, there is a problem known as the expansion of dual corporate tax system. May I have your opinion on this?
Previously, I was an organizer of the Tax System Study Council within the Liberal Democratic Party. At the beginning of June we the council stated that we had not decided whether we should implement this reduction but that the government must pay special attention to small and medium sized firms. Ultimately, the relevance depends on how much we lower the corporate ex rate next year. I think that it probably will not apply to small and medium sized firms soon. The question concerns large firms. If sized based corporation tax were to be implemented then it places a heavy burden on large firms. We have to carefully consider if we adopt it for large firms at the same time we debate whether to increase personnel expenses and salaries.
Have you ever been to Fukushima after the accident?
I have not been to Fukushima since the accident. As for the future, I would like to visit Fukushima as soon as I can.
The local parliament of Sendai City is going to debate discuss the consent of residents for the restart of the Sendai Nuclear Power Plant on October 28. Are you going to visit Sendai City before that?
Honestly, I have just become a Minister, so I do not know about the timing of the restart decision, but I would like to learn more about the timing when I visit Sendai City.
I would like to ask you when you will choose the location of the final disposal site for the radioactive waste.
I have just studied this, the working group on radioactive waste is going to start soon.
I think it is best if the experts decide the specific criteria on which we make the choice. If the criteria are not decided, we can’t decide “when”. I heard that we are not at the stage where we can talk about “when”.
I’ll ask about the rural economy. There is a gap between the rural economy and the urban economy. How would you estimate the effect of Abenomics and the current situation on this gap?
I don’t think it is true to say that the positive effect of Abenomics has not spread to rural areas. My home town, Fukuyama city in Hiroshima prefecture, is a place where small and medium size firms are energetic. But, there is a difference in economic performance between rural and urban areas. Therefore, the law for job creation in rural towns is important and we have to implement it thoroughly. I think that policy to promote the relocation of people from rural to urban areas is important. Since the start of the Edo Shogunate, people have migrated from rural areas to Tokyo and Osaka for over 400 years. I think that we have to do the reverse in 100 years. This might be too big picture, but paying attention to rural areas is important. I believe that the bill that we will be submitting is important in this sense.
I would like to ask about the decommission of reactors. Last week former minister Yuko Obuchi met with the chairman of the Federation of Electric Power Companies and demanded him to decide as soon as he possible whether he will stop or decommission the nuclear reactors which will be over 40 years old next year. May I have your opinion on this?
( After the Great Eastern Earthquake in 2011, the Japanese government decided that the operation of nuclear reactors have to be at most 40 years, in principle. But, as an exception, operations can be extended for 20 more years only once you apply for Nuclear Regulation Authority. )
I heard that former minister Yuko Obuchi asked the chairman of FEPC to make a decision over seven reactors that will be 40 years old next yea. They will go through examination to determine whether they will be granted permission to extend operation, so next year each electric power company has to make a decision ( whether they apply for extension or not ) and if they decide that they want to apply, the Nuclear Regulation Authority will decide whether to permit the extension. I assume that the Minister asked for this, because there is no time remaining. So, she urged the electric power companies to make their decisions. If electric power companies decide to decommission, once they decide to decommission, nuclear reactors will not perceived to be property. Therefore, power companies have to report a large accounting loss. I think that it is a very difficult issue.
What do you think about making an environment that can be supportive of decommission of nuclear reactors.
Well, let me see… We are debating… which organization is going to be in charge of it? As for the policies about decommission the Nuclear Energy Subcommittee is discussing, there are various problems coming up. We have to think about a practical way in which makes it possible for electric power companies to decommission.
A member staff cuts in and says: I am sorry, we have to end the meeting soon. We will accept only several more questions. There are many fields, so if you have a question on other issues.
You mentioned that as government policy, you will order the restart of nuclear power plants whose safety was confirmed. What is your personal opinion on nuclear power?
I have no doubt that nuclear power will continue to be the important base source of energy for our country. With this perspective, I think that we have to consider how and when to start nuclear reactors whose safety is confirmed while having consent of residents who live near nuclear power plants. I am not thinking about building new reactors in the future. I am thinking the use of sustainable energy with smaller cost. I think it is my duty and the ministry’s duty to consider the above issues.
As for the TPP, the progress of negotiation is very slow, the US claims that this is because Japan is rigid on tariff on agricultural products. How would you feel about this? My second question is on the sales tax and reduced tax rate.
As for the TPP, until yesterday I had only received information from the media. I have not heard anything about the TPP from the METI today, so there are many things that the METI does not know about the TPP. Therefore, honestly, I don’t think I am in a position to convey my opinion on the TPP. As for the sales tax, I think that there are merits and demerits to the case of raising the sales tax in October 2015 as it was originally scheduled, and also to the case of postponing it. Ultimately, the hearing is going to start in the Cabinet in November and then, the Prime Minister is going to decide on his own. As for reduced tax rate, the Liberal Democratic Party has promised that we would implement a reduced tax rate for people with lower income. This summer, I received opinions on the reduced tax rate from around 60 organizations. I feel that there are dividing opinions among Japanese citizens. In this circumstance, if we were to adopt a reduced tax rate for food items, where should we draw the line? Drawing the line is extremely difficult. Should we adopt reduced tax rate for all food items? If we adopted reduced tax rate on all food items, then where will we raise funds for social welfare? Also, if we adopted the reduced tax rate, we have to make a system called invoice. It takes time to implement this system of invoice. Ultimately, the government will make vendors responsible for carrying out the invoice system. But, before we make them responsible for the invoice system, they have to become familiar with it. Including people who operates small businesses, we have to ask them to be familiar with it.
If the system makes it easier for small business people to tell the difference between the tax they paid through regular tax rate and reduced tax rate, maybe it will not take a long time. But, the more we study this, the more difficult problems we face. There might be a clear line that we should draw, in which case it won’t take much time. But, ultimately, we have to make a system which all citizens can understand. I feel that this is a very hard job for the members of Liberal Democratic Party.